Retail sales have stagnated, largely undoing the benefits gained from Black Friday sales, according to Deloitte Access Economics.
Its latest retail forecast shows that consumer spending has tightened over the last quarter as consumers await relief.
“The year has really begun with a fizzle rather than a bang for most retailers,” says Deloitte Access Economics partner and principal report author, David Rumbens.
“With real spending contracting by 0.4 per cent over the March quarter of 2024, many retailers have lost the gains achieved over the Black Friday sales as consumer frugality comes back in vogue.”
A key driver of this has been the persistently high levels of price growth seen in essential spending outside of retail (rents, insurance, utilities) causing consumers to cut back on spending on discretionary retail, he adds.
“The immediate road ahead is looking rocky, particularly as unemployment rises further. But there is also some sunshine—real wage growth, stage 3 tax cuts and interest rate cuts (eventually) will spur consumer spending later in 2024 and into 2025.”
Indeed, real retail turnover is expected to increase from 0.0 per cent in calendar 2024 to 2.3 per cent in 2025. Household goods turnover should pick up more with better economic conditions and with an uplift in national building activity, supported by the government’s ambitious housing targets.
The additional dollars from tax cuts later this year may bump up spending at cafes, restaurants and takeaway in the September and December quarters.
