Mixed signals emerged from the latest Australian retail sales figures for April 2024.
While overall turnover edged up slightly, spending patterns varied across sectors. Non-food retail saw some improvement, with categories like household goods and “other retailing” experiencing growth. However, clothing and footwear sales dipped, indicating a shift in consumer priorities.
The retail turnover experienced a modest rise of 0.1% in April 2024, according to seasonally adjusted figures released today by the Australian Bureau of Statistics (ABS). This increase comes after a 0.4% decline in March 2024 and a 0.2% rise in February 2024, highlighting continued weak retail spending.
Ben Dorber, the head of retail statistics at ABS, stated, “Underlying retail spending continues to be weak with a small rise in turnover in April not enough to make up for a fall in March. Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending.”
Sector Performance
Turnover in most non-food related industries saw some improvement in April. “Other retailing” led the way with a 1.6% rise, followed by household goods retailing at 0.7%, and department stores with a slight increase of 0.1%. However, clothing, footwear, and personal accessory retailing declined by 0.7%.
Dorber attributed some of the volatility in turnover to the timing of Easter and school holidays, which varied across the country. “The relatively earlier Easter and the different timing of school holidays meant we saw some added volatility in turnover in March and April,” he explained.
Food-related spending presented a mixed picture. Food retailing dropped by 0.5%, partially reversing a 0.8% rise in March, influenced by pre-Easter alcohol purchases. Meanwhile, cafes, restaurants, and takeaway food services saw a modest increase of 0.3%.
Retail turnover growth varied across the states. New South Wales recorded the largest increase at 0.7%, followed by South Australia at 0.5%. Other regions, including Western Australia, Tasmania, and the Northern Territory, showed relatively unchanged figures.
The data reflects a cautious consumer sentiment and a flattening trend in retail turnover since the start of 2024. The ABS will release more detailed information on the April reference period on 4 June 2024.
The ABS expressed gratitude to businesses for their ongoing support in responding to surveys, which is crucial for compiling these statistics.
Anneke Thompson, Chief Economist at CreditorWatch, stated that the ABS data released confirms persistently weak consumer spending in Australia, with retail turnover flat since early 2024. Only ‘other retailing’ showed notable growth in April, influenced by the early Easter and school holiday timing. “Data released today by the ABS confirms that consumer spending in Australia is still very weak, with retail spending remaining flat since the start of 2024. Only ‘other retailing’ recorded any reasonable growth over April 2024, although this was impacted by the very early Easter and timing of school holidays over March and April.
“Westpac consumer confidence data confirms that Australian consumers remain extremely despondent. Although Treasury forecasts that income tax cuts and cost of living measures announced in the budget will assist in a recovery in real disposable income over the 2025 financial year, it remains to be seen if this will flow on to increased spending in the retail sector.
“Even if real disposable incomes do increase with income tax cuts, and weakening labour market and rising unemployment tends to make Australian consumers uneasy about over spending. It is likely, then, that Australian consumer confidence will remain weak even if they have more disposable income. A recovery isn’t likely until we see two or three cuts to the cash rate, as only then will mortgage holders start to feel more confident that they have some breathing space in their monthly budget.
“Given we are unlikely to see the second or third cut to the cash rate until the final quarter of 2025 financial year, we expect that insolvencies in the retail sector will increase, especially amongst smaller, discretionary retailers. The retail trade sector has already recorded a 35 per cent increase in insolvency rates over the year to April 2024.”
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Australian retail turnover inched up a mere 0.1% in April 2024, barely surpassing a decline in March. News, Retail Dynamic Business
