January retail sales increase 1.1% year on year amid cost-of-living squeeze

Australian retail sales increased a modest 1.1% year-on-year in January 2024, with cost-of-living pressures, impacting discretionary spend and forcing several categories into decline.

According to figures released today by the Australian Bureau of Statistics (ABS), shoppers spent $35.7 billion across the country in January.

Category performance was mixed, with the highest year-on-year sales increases in other retailing – including recreational, sporting goods and cosmetics (up 2.8%).

Cafes, restaurants, and takeaway (up 2.5%) and food (up 1.9%) also recorded growth.

Clothing, footwear and accessories (down 1.7%), household goods (down 1.4%) and department stores (down 1.3%) reported spending decline in January.

Most states and territories recorded growth year-on-year, led by Tasmania and Northern Territory (both up 2.8%), Queensland (up 2.6%), South Australia (up 2.2%), Western Australia (up 1.8%), ACT (up 1.0%) and Victoria (up 0.8%).

New South Wales recorded a spending decline of 0.3%.

Australian Retailers Association (ARA) CEO Paul Zahra said January’s results were subdued as anticipated, likely a result of shoppers limiting their spending after Christmas and the first week of Boxing Day sales.

“The two strongest performers, ‘other retailing’ and cafes, restaurants, and takeaway, would have been bolstered by people wanting to enjoy their summer outdoors,” he said.

“While spending on food remains stable, the category performance has reduced in recent months with shoppers increasingly opting for value brands and lower cost options where possible.

“The biggest discretionary categories, clothing, household goods and department stores, all suffered decline as Australians tightened their purse strings amid the cost-of-living crunch.

“Shoppers are continuing to feel the impact of the cost-of-living challenges and interest rate increases, making it a difficult time to be a discretionary retailer.”

Mr Zahra said the Reserve Bank of Australia’s (RBA) next monetary decision on March 19 will have significant bearing on the trading months ahead.

“Inflation is trending downward and retail spending has softened significantly, which we hope will encourage the RBA to pause interest rates again, with the aim to lower them at some point this year,” Mr Zahra added.

CATEGORY January 2023 January 2024CHANGE
Food$13.967 billion$14.233 billion+1.9%
Household goods$5.857 billion$5.771 billion-1.4%
Clothing, footwear, accessories$2.985 billion$2.932 billion-1.7%
Department stores$1.901 billion$1.876 billion-1.3%
Cafes, restaurants, takeaway$5.246 billion$5.380 billion+2.5%
Other$5.376 billion$5.529 billion+2.8%
Total$35.335 billion$35.723 billion+1.1%
STATEJanuary 2023January 2024CHANGE
New South Wales$11.176 billion$11.139 billion-0.3%
Victoria$9.113 billion$9.189 billion+0.8%
Queensland$7.183 billion$7.373 billion+2.6%
South Australia$2.267 billion$2.319 billion+2.2%
Western Australia$3.912 billion$3.982 billion+1.8%
Tasmania$706 million$726 million+2.8%
Northern Territory$315 million$324 million+2.8%
ACT$662 million$669 million+1.0 %
Total$35.335 billion$35.723 billion+1.1%

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