Australian retail sales have continued to rise in July 2022, with $34.7 billion spent in stores and online. This is an increase of 16.5% on a year ago and up 1.3% compared to the previous month, according to figures released today by the Australian Bureau of Statistics.
It is the largest rise in four months, with the fashion, footwear and accessory and department stores seeing the greatest increase.
The rise in July follows a 0.2 per cent rise in June 2022 and 0.7 per cent rise in May 2022.
Australian Retailers Association (ARA) CEO Paul Zahra said consumer spending remains strong despite cost-of-living challenges, however he warned sales could soften in the months ahead as household budgets are placed under increased stress.
“It’s pleasing to see retail sales maintain their strength – this is an incredible result considering the inflationary pressures consumers are under at the moment,” Zahra said.
“Confidence remains low, but that hasn’t translated yet into reduced spending, with retail sales continuing their record-breaking run.
“However, the concern is that with inflation yet to peak and the full impact of increased mortgage repayments yet to flow through to household budgets, we may see sales soften in the months ahead.”
Zahra continued, saying the figures should be treated with caution in their comparisons to a year ago, as Australia cycles the 2021 Delta lockdowns where businesses suffered.
The growth in clothing, footwear and accessories and department stores were up significantly compared to July 2021, “highlighting the impacts on those businesses at this time last year when they had to close their physical stores.”
“We also note that the high sales volumes can also be partially attributed to the higher consumer prices we’re seeing across the economy, particularly in the food industries.
“Father’s Day is coming up on Sunday and the ARAs forecasts with Roy Morgan show gift spending is down 7.7% compared to last year, with 42% of consumers saying the current cost of living challenges will impact how much they’ll spend.
“So while sales are strong for now, the concern is that consumers will start to be squeezed when it comes to their discretionary purchases in the run-up to Christmas.”
Ben Dorber, head of retail statistics at the ABS, said the 1.3% rise in retail trade was the largest since the 1.6% rise in March 2022.
"Turnover rose in five of the six retail industries in July 2022. This shows that, despite cost-of-living pressures, households are continuing to spend."
Department stores had the largest rise, up 3.8 per cent, followed by clothing, footwear, and personal accessory retailing (3.3%), cafés, restaurants, and takeaway food services (1.8%), other retailing (1.6%) and food retailing (1.2%).
Household goods retailing fell for the third time in four months, down 1.1 per cent in July 2022.
On a state-by-state basis, turnover rose in Victoria (1.8%), the Australian Capital Territory (1.8%), Western Australia (1.6%), New South Wales (1.3%), South Australia (1.2%), the Northern Territory (0.7%) and Queensland (0.4%).
Tasmania was the only state where retail turnover fell, down 0.3 per cent. This was the state’s first fall in 2022.