Clothing, footwear and accessories monthly turnover has dropped by $30.6 million in October 2023, Australian Bureau of Statistics (ABS) data revealed.
Overall sales in fashion for October was $2.98 billion, down from $3.01 billion in September 2023. Compared to October 2022, fashion sales have fallen by exactly $20 million.
Department store sales have also dropped by $12 million to $1.90 billion in October 2023, however the sector is up by around $8 million compared to October 2022.
Overall Australian retail turnover fell 0.2% to $35.76 billion in October, following a rise of 0.9% in September and a 0.2% rise in August.
"Retail turnover fell in October after a short-lived boost in spending in September,” ABS head of retail statistics Ben Dorber said. “Turnover was down in all retail categories except food retailing [up 0.5%].
“It looks like consumers hit the pause button on some discretionary spending in October, likely waiting to take advantage of discounts during Black Friday sales events in November. This is a pattern we have seen develop in recent years as Black Friday sales grow in popularity.”
Retailers will now be banking on a windfall from the Christmas sales period, according to the National Retail Association (NRA).
“The decline in spending, despite the Halloween discount buzz, indicates shoppers are being more conservative about where they spend their money, and the RBA’s snap decision to raise interest rates in November was ill-advised,” NRA director Rob Godwin said.
"We implore the new RBA Governor Michele Bullock to hold interest rates in December to give retailers a fighting chance this Christmas.
“Consumers can expect competitive bargains to ramp up in the 12 days before Christmas as retailers pull out every trick in the book to make up for a flat year of sales.”
Victoria experienced the biggest decline in retail sales at 0.8%, while Queensland experienced a 0.6% sales boost, which NRA claim could be attributed to the record number of cars sold across the state in October.
However, despite the monthly drop, overall retail sales lifted by 1.2% year-on-year, up $421 million from October 2022.
Australian Retailers Association (ARA) CEO Paul Zahra said this yearly positive lift is mostly attributed to spending on essentials such as food.
“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,” he said.
“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.”
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.
“Whilst 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.”