Consumers keep spending at record levels despite cost-of-living pressures

Retail sales continued to strengthen in August, with $34.9 billion spent in stores and online – an increase of 19.2% on a year ago and up 0.6% compared to the previous month according to figures released today by the Australian Bureau of Statistics.

As we continue to cycle the Delta lockdowns of 2021, there were substantial year on year sales increases for clothing, footwear and personal accessories (up 80.4%), cafés, restaurants and take away food (up 58.8%) and department stores (up 54.6%).

Australian Retailers Association CEO Paul Zahra said it’s another outstanding result, with consumers continuing to spend at record levels in the face of cost-of-living challenges.

“As we approach the Christmas trading quarter – the most critical time of year on the retail calendar – it’s encouraging to see retail sales maintain their strong momentum. Despite an uncertain economic outlook, rising inflation and cost of living pressures, consumers are continuing to open their wallets and spend at record levels. This is the eighth consecutive month-on-month rise in retail sales, which is truly remarkable considering the challenging economic environment,” Mr Zahra said.

“Having said that, we remain cautious about the economic outlook. There is likely to be a lag effect from current inflationary conditions. We haven’t seen the full impact of the RBAs interest rate increases flow through the economy, and inflation is yet to reach its forecast peak, so we could see a softening of sales as we enter 2023.

“The cut to the fuel excise ends at midnight tonight, which will add further financial pressure to businesses and consumers. However, as it stands – retail sales are continuing their record-breaking run and businesses will be hoping that momentum continues.

“The most pressing issues facing retailers right now are supply chain constraints and staff shortages, which are at record levels, making the recruitment of casuals for the all-important Christmas trading period a difficult one. Whilst sales are at record levels, small businesses in particular remain acutely challenged by the rising cost of business.”

Retail category performance

RETAIL CATEGORY YEAR ON YEAR SEASONALLY ADJUSTED RETAIL SALES GROWTH

(AUGUST 2022 v AUGUST 2021)

Food retailing+1.8%
Household goods+16.4%
Clothing, footwear and personal accessories+80.4%
Department stores+54.6%
Cafés, restaurants and takeaway food+58.8%
Other retailing+13.8%
Total retail+19.2%

State and territory performance

STATE/TERRITORYYEAR ON YEAR SEASONALLY ADJUSTED RETAIL SALES GROWTH

(AUGUST 2022 v AUGUST 2021)

NSW+29.5%
Victoria+20.3%
Queensland+14.2%
Western Australia+8%
South Australia+9.8%
ACT+32.3%
NT+4.5%
Tasmania+7.2%
All states and territories+19.2%

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