Retail Sales Steady, But Not Great: ABS Data

People can be seen in front of the Myers store in the city of Melbourne, Australia, on Oct. 27, 2023. (Susan Mortimer/The Epoch Times)

Retail sales increased 0.9 percent in September 2023 compared to the previous month to $35.9 billion for the year, according to the latest Australian Bureau of Statistics Retail Trade data.

Year-on-year data saw retail sales up two percent in September 2023 with cafes, restaurants, and takeaway sales seeing the strongest annual growth, up 6.1 percent, followed by food sales, up 3.5 percent.

Discretionary spending categories saw modest growth, led by other retailing (recreational goods, sporting goods, and cosmetics), up 1.6 percent year-on-year. Department stores saw a rebound from a decline in August, up 1.3 percent, followed by clothing, footwear, and accessories, up 1.1 percent.

Household goods spending declined, down 4.4 percent year-on-year, marking nine consecutive months of negative growth.

While these results are mixed, overall growth in this sector means inflation is still of concern, and the unexpected pace of growth means that interest rates may be hiked when the Reserve Bank of Australia meets on Nov. 7.

Costs Squeezing Businesses From All Sides

Many small and medium-sized retailers in Australia are feeling apprehensive about their financial outlook due to ongoing cost-of-living challenges that are dampening consumer spending.

According to research by the Australian Retailers Association (ARA) and American Express, 55 percent of small to medium-sized retailers expressed uncertainty about their future while 43 percent were struggling to meet financial targets.

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The survey showed that the majority of retailers saw the cost of business increase over the last year, with 93 percent experiencing rising costs, with around a third (36 percent) stating that their costs had increased by more than 10 percent, outpacing inflation.

ARA CEO Paul Zahra said the results were indicative of the many pressures being faced by small retailers.

He said it was a “difficult time to own a small business in Australia—one of the most difficult in recent history.”

He went on to say that areas of concern to retailers are the slowdown in consumer spending, rising wage expenses, increased costs of goods and services, and difficulties in finding adequate staffing as “shoppers scrutinise their spending and costs continue to increase across the board.”

Emily Roberts, general manager of Consumer and Commercial Services at American Express, stressed that small business formed the backbone of the economy and urged Australians to spend more with them.

“Every dollar spent with a small business is a dollar towards maintaining the vibrancy of our local communities, rewarding the tenacity of business owners, and ensuring that our local stores open their doors for another day,” she said.

‘Financial Health’ of Australians a Concern

Research house Roy Morgan forecasted in their September 2023 Retail Sales report that sales had fallen 1.4 percent over 2023 after 12 interest rate rises pushed more people into mortgage stress, causing consumer confidence to fall to a 15-year low.

Roy Morgan classified 29.2 percent of mortgage holders as “at risk,” meaning mortgage repayments were taking up a more significant proportion of their household income.

The number of mortgage holders in this category increased by 642,000 over the past year.

The ANZ-Roy Morgan consumer confidence index was also at a 15-year low at 78.7, and for the last 27 weeks has remained below 80.

Scores under 100 show consumer sentiment as pessimistic, while scores below 80 are a sign that the financial health of Australians is of concern.