Retail sales increase as we lap the 2021 Delta lockdowns, but consumers continue to be challenged by the rising cost of living

Retail sales continued to strengthen in July with trade increasing 17.9% compared to the same month last year, according to Mastercard SpendingPulse™, which measures in-store and online retail sales across all forms of payment.

Most retail categories recorded substantial year on year sales growth as we lap the Delta lockdowns of 2021, led by Lodging (up 63.3%), Jewellery (up 47.6%) and Apparel (up 31.3%).

Australian Retailers Association CEO Paul Zahra cautioned that sales in discretionary retail categories are elevated in their comparisons to 12 months prior, when businesses in NSW and Victoria were severely restricted.

“In July last year, our two largest states were in lockdown and spending dried up as many non-essential retailers were forced to close their doors. It wasn’t until October that businesses in NSW and Victoria finally reopened, and consumers were able to shop in-stores once again,” Mr Zahra said

“With travel restrictions in place a year ago, and tourism operators pushed to the brink, it’s no surprise to see Lodging leading the way, with sales up 63.3%, as people get back to booking accommodation for work and holidays in Australia and abroad.

“The current retail trade environment is very different to a year ago and businesses are dealing with a whole new set of challenges due to inflation and rising costs associated with fuel, energy, supply chains and rents.

“What’s pleasing is that sales are currently holding up well despite the rising cost of living and interest rates, although it appears as though we haven’t seen the full impact of this hit consumers. The ARAs forecasts with Roy Morgan on Father’s Day gift spending are down 7.7% compared to last year, with 42% of consumers saying the current cost of living challenges will impact how much they’ll spend.

“The concern is with inflation yet to peak, consumers will start to be squeezed when it comes to their discretionary purchases,” Mr Zahra said.

Mastercard SpendingPulse July 2022

SECTORS (TOTAL SALES) NOMINAL SALES GROWTH
July 2022 vs July 2021

(Year on Year)

Apparel +31.3%
Electronics +22.6%
Fuel and Convenience +26.0%
Groceries +4.5%
Home Furnishings +18.7%
Jewellery +47.6%
Lodging +63.3%
TOTAL AUSTRALIA RETAIL SALES +17.9%

Mastercard SpendingPulse™ reports on national retail sales across all payment types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check. As such, SpendingPulse™ insights do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data.

 

Media Enquiries:

Dominic Cuschieri

M 0418 224 072

E dominic.cuschieri@retail.org.au

 

About us: The Australian Retailers Association (ARA) is the oldest, largest and most diverse national retail body, representing a $400 billion sector that employs 1.3 million Australians and is the largest private sector employer in the country. As Australia’s peak retail body, representing more than 120,000 retail shop fronts and online stores, the ARA informs, advocates, educates, protects and unifies our independent, national and international retail community. To learn more about ARA’s exclusive member benefits and more, visit retail.org.au

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