Retailers might be wary of what’s to come this holiday season after the latest RBA rate hold and subdued August spending figures released by the Australian Bureau of Statistics (ABS).
Spending in retail-related categories grew by a modest 3.7 per cent in August compared to the same period in 2024, registering $37.8 billion in sales.
Household goods retailing was up by 3.7 per cent, other retailing increased 5.6 per cent, department stores and large online retailers were up 3.5 per cent and clothing, footwear and accessories increased by 1.8 per cent.
“Overall, this result reflects retailers continue to face very mixed conditions,” says ARA CEO Chris Rodwell.
“It also reveals a reliance on major spending events to stimulate sales. Whilst trading remains above overall 2024 levels, unfortunately August growth dropped back compared to July (up 4.6 per cent yoy) and June (up 4.9 per cent yoy).
“Retailers want improved sales momentum as we enter the all-important peak season, where many discretionary retailers make up to two-thirds of their annual profits. However, these results reflect many Australians still face significant budgetary constraints and that consumer confidence remains subdued.”
The states of Western Australia (up 5.6 per cent), Queensland (up 4.6 per cent) and Tasmania (up 4.6 per cent) reflected stronger growth, while the Northern Territory (up 4.4 per cent) and South Australia (up four per cent) recorded reasonable performance. However, Victoria (up 3.3 per cent), New South Wales (up 2.3 per cent) and the ACT (up 1.6 per cent) all registered subdued performance.
“Running a retail business remains challenging, with rising operational and supply chain costs. Compounding this, the ongoing surge in retail crime across the country imposes additional financial and operational pressures that many retailers simply can’t sustain,” he adds.
“We continue to advocate for cutting unnecessary regulation and red tape at both federal and state levels to help ease cost pressures and put downward pressure on prices for consumers. Equally, we’re pushing for a coordinated national strategy to address retail crime, which currently costs the sector an estimated $9 billion annually plus untold emotional distress.”
