Consumers tightening purse strings as cost-of-living pressures bite
Retail sales volumes experienced a notable decline in various sectors during the June quarter, according to new data from the Australian Bureau of Statistics.
Retail sales volumes dropped 0.5%, making the June quarter the third quarter in a row to post a fall.
Ben Dorber, head of retails statistics for ABS, attributed the fall to consumers tightening their spending in response to cost-of-living pressures.
“It’s the first time since 2008 that retail sales volumes have recorded three consecutive quarterly falls,” Dorber said. ”Retail sales volumes are down 1.4% compared to the June quarter last year. Outside of the pandemic period, this is the first time since 1991 that sales volumes have fallen compared to the previous year.”
Food retailing witnessed a consecutive fall for the second time, with a decrease of 0.7% and a dip of 0.2% compared to the same period last year. Additionally, sales volumes for cafes, restaurants, and takeaway food services experienced a decline of 0.2%, marking the first decrease since the COVID-19 Delta lockdowns occurred in September 2021.
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The downturn in retail sales volumes extended beyond the food sector. Household goods retailing and department stores also faced decreases of 1.5% and 1.4%, respectively, according to ABS data. On the other hand, other retailing sales volumes remained relatively stable with no significant changes observed.
“The widespread fall in sales volumes reflects what retailers have been telling us about consumers focusing on essentials, buying less or switching to cheaper brands,” Dorber said.
In contrast to the wider downturn, clothing, footwear and personal accessory retailing experienced a rise of 1.1% in retail sales volumes for the quarter. This increase can be attributed to increased promotional activities and discounts implemented by retailers, the ABS said.
The ABS data comes on the heels of a NAB report that showed conditions for small businesses were also worsening.
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