Less spending on mid-year sales sees retail turnover fall

Australian retail turnover fell 0.8 per cent in June 2023, according to figures released today by the Australian Bureau of Statistics (ABS).

This follows a 0.8 per cent rise in May 2023, and a 0.1 per cent fall in April 2023.

Ben Dorber, ABS head of retail statistics, said: “Retail turnover fell sharply in June due to weaker than usual spending on end of financial year sales. This comes as cost-of-living pressures continued to weigh on consumer spending.

“There was extra discounting and promotional activity in May, leading up to mid-year sales events. This delivered a boost in turnover for retailers, but that proved to be temporary as consumers pulled back on spending in June.”

There were falls across all non-food industries. Department stores (-5.0 per cent) recorded the largest fall, followed by other retailing (-2.2 per cent) and clothing, footwear and personal accessory retailing (-2.2 per cent). Household goods retailing also fell (-0.1 per cent), the eighth monthly fall in turnover over the past 12 months.

Food-related spending was mixed, with a fall in cafes, restaurants and takeaway food services (-0.3 per cent) and a rise in food retailing (+0.1 per cent).

“Over the last 12 months, growth in food-related spending has mostly been driven by rising food prices. We saw in Wednesday’s release of the that food prices rose again in the June quarter. Consumers are responding to these price rises by changing to cheaper brands or by simply buying less.

“To see the full effect of consumer prices on recent retail turnover growth, it will be important to look at quarterly retail sales volumes which we release next week,” Mr Dorber said.

Additional information on the June reference period, including quarterly price and volume data, will be released on 3 August 2023.

Retail turnover was mixed across the states and territories with the eastern mainland states all recording large falls.

The ABS has now reinstated Retail Trade Trend estimates.

Trend estimates from July 2022 onwards show that underlying growth in retail spending slowed considerably towards the end of 2022, with only modest trend growth in recent months.

Trend estimates from March 2020 to June 2022 are not available due to the degree of disruption and volatility caused by COVID-19. Trend estimates throughout the pandemic period are likely to be unhelpful and potentially misleading for users in interpreting underlying trend in retail activity.