Sky-high interest rates and conservative spending have caused year-on-year spending in July to flatline, as revealed by the Australian Bureau of Statistics’ latest retail trade update.
³Ô¹ÏÍøÕ¾ Retail Association Interim CEO Lindsay Carroll said the unchanged trade figures in July 2024 are worrisome, given Australia’s exploding population growth.
“The industry is at the mercy of consumer sentiment; that’s just the nature of retail. We need policymakers to loosen the reins somewhere, or we’re in for a tough Christmas trading period,” Ms Carroll said.
“Clothing, footwear, and personal accessory retailing had the largest fall of 0.5 per cent, followed by department stores (-0.4 per cent) and cafes, restaurants, and takeaway food services (-0.2 per cent).
“We have two more Reserve Bank meetings before we head into the biggest retail trading season of the year, so for business owners, the apprehension of another interest rate rise has them gripping every sale they make.
“Every month that sees a regression in sales or real-time profits is an employee you can’t afford to keep, a security upgrade you can’t have, or a business expense you can’t meet,” she said.
Retail turnover fell for most states and territories, with only Queensland (-0.2%), Victoria (-0.1%), and the Northern Territory (-0.5%) experiencing slight hikes in consumer spending.
“Today’s ABS data is also an indicator that consumers are chasing bargains, but this comes at a heavy cost to retailers,” she said.
“Most smaller retailers cannot afford to rely on heavy discounting strategies to get by, and it is inevitably these businesses that exit the market.
“We call on policymakers to create a more supportive environment for Australian businesses, one that’s fit for investment and one with a future for aspiring retail owners.”
The ³Ô¹ÏÍøÕ¾ Retail Association represents more than 60,000 stores across Australia. It has been serving businesses in the retail and fast-food sectors for close to 100 years.
