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Australian retail sales increased 1.2% year-on-year in October, with increases in food related categories bolstering otherwise underwhelming results.

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

The most significant year-on-year sales increases came from cafes, restaurants, and takeaway (up 4.6%) and food (up 3.3%), as has been the case in recent months.

Department stores (up 0.4%) and other retailing, including recreational, sporting goods, cosmetics (up 0.3%) recorded stable spending year-on-year, while clothing, footwear and accessories experienced decline (down 0.7%).

Household goods again recorded spending decline (down 4.6%), marking ten consecutive months of negative growth.

All states and territories recorded growth year-on-year, led by Western Australia (up 3.5%), ACT (up 3.2%), Northern Territory (up 2.8%), South Australia (up 2.8%), Victoria (up 1.0%), Queensland (up 0.7%), Tasmania (up 0.7%) and New South Wales (up 0.1%).

Australian Retailers Association (ARA) CEO Paul Zahra said the October results only remained positive due to consistent spending on essentials like food.

“Spending on essentials remains consistent, while discretionary goods categories are clearly taking a hit,” Mr Zahra said.

“Food and takeaway again led the spending growth, and this is consistent with what we’ve seen all year – shoppers are prioritising the essentials in a cost-of-living crisis.

“While spending on takeaway remains positive with shoppers opting for value options such as quick service restaurants to ease pressure on their budgets.

“Shoppers are increasingly feeling the crunch of the cost-of-living crisis and interest rate increases, making it a challenging time to be a discretionary retailer.

“October’s underwhelming results also came amid the Reserve Bank of Australia’s last interest rate pause. We expect retail sales will be impacted even more by November’s interest rate hike.”

Mr Zahra said retailers will be watching for November’s retail trade results with interest, given the prevalence of this year’s Black Friday sales.

“Black Friday has been forecast to be record-breaking this year, with shoppers desperate to cross off their Christmas wish-lists during the biggest pre-Christmas sale event of the year, which is likely to impact December’s numbers.

“Retailers and Australians will be anxiously awaiting the RBA decision next week, which will affect the final few weeks of Christmas spending.

“Whist much has been said about the cost-of-living crisis, retailers are also experiencing a cost of doing business crisis and will be concentrating on offering the best service and value for budget conscious shoppers during the all-important Christmas trading period.”