Australians spent $35 billion in February 2023, according to the Australian Bureau of Statistics (ABS), with year-on-year (YoY) sales up 6.4% as the country cycles the Omicron wave this time last year.
Department stores and fashion retail came behind food and drink retail in YoY growth, up 7.7% and 6.2% respectively. Cafes, restaurants and takeaway saw the largest growth of 17.1%, with food retail up 7.9%.
Other retailing spending increased by 3.2% YoY, while household goods declined by 2.3%.
Across the states and territories, ACT (up 9.2%) and Western Australia (up 8.7%) led the spending growth, followed by Tasmania (up 7.1%) and South Australia (up 7.1%). New South Wales (up 6.6%), and Victoria (up 6.1%) also recorded solid increases.
Australian Retailers Association (ARA) CEO Paul Zahra said sales growth in some essential categories like food is now close to neutral when inflation is taken into consideration. However, he said that other categories are performing well as people continue to enjoy their freedoms post-pandemic.
“We’re certainly seeing the start of the spending slowdown as a result of the cost-of-living pinch gripping Australians, with household goods being the first discretionary category to continue to see a reduction in spend,” Zahra said.
“Over the previous few months, spending growth has continued to gradually soften. We’re now at the point in essential categories like food where inflationary price increases are mostly driving retail spending growth.
Commenting on the four strongest categories, Zahra said this is due to the resurgence in consumers getting out and about, which was impacted during the pandemic.
He added that this is a challenging environment for retailers, who are also managing rising costs, labour shortages and supply chain issues.