Spending across department stores and fashion retailers have dropped by -0.2 per cent and -1.0 per cent respectively in March 2023 compared to the month prior, new data from the Australian Bureau of Statistics (ABS) has revealed.
This represents a $31 million drop in apparel, footwear and accessories, and a $3.7 million drop in department store sales.
Alongside fashion and department stores, household goods spending has also dropped by -0.4 per cent.
The drops follow rises in both categories in February 2023, with fashion then rising 0.6 per cent and department stores up 1.0 per cent. Compared to March 2022, year-on-year sales for fashion and department stores were up 3.6 per cent and 4.7 per cent respectively.
Despite the monthly drop in both fashion and department stores, overall Australian retail turnover rose 0.4 per cent in March, following a 0.2 per cent rise in February 2023.
ABS head of retail statistics Ben Dorber said while retail sales recorded a third straight rise in March, a pull-back in spending on discretionary goods has seen monthly turnover remain at a similar level to six months ago.
This month’s rise was driven by the combined growth in food-related spending, with rises in both cafes, restaurants and takeaway food services (1.5 per cent) and food retailing (1.0 per cent).
“Food retailing has now recorded 13 consecutive monthly rises, largely driven by high food inflation,” Dorber said.
“Businesses in cafes, restaurants and takeaway food services are passing on their rising costs to consumers through price rises, while also benefitting from strong demand driven by the continued return of large-scale cultural and sporting events.
“Spending on non-food retailing has slowed in response to interest rate rises and increased cost of living pressures. This follows increased spending during and immediately following much of the COVID-19 pandemic period.”
Retail turnover rose modestly across the states and territories, with most rises below 1.0 per cent. Queensland (+1.2 per cent) was the only state or territory to record a rise over 1.0 per cent, and this was a bounce back from a 0.4 per cent fall in February.
“The latest Consumer Price Index showed that while growth in inflation slowed in the March quarter, it remained at a high level,” Dorber said. “To see the effect of consumer prices on recent turnover growth, it will be important to look at quarterly retail sales volumes, which we release next week,” Mr Dorber said.
In response to the figures, the National Retail Association (NRA) is calling for urgent cost of living relief for households in next week’s federal budget.
“With inflation running at seven per cent, annual growth of 5.4 per cent means retailers are actually going backwards, particularly when you take into account increasing rent, wages and input costs,” NRA CEO Greg Griffith said.
“There’s no doubt the cost of living continues to hurt Australian households and retail businesses, and that’s why we’re looking for a strong response in next week’s Federal Budget.
“The Treasurer and the Albanese Government are making all the right noises, and today’s figures demonstrate without doubt the need for urgent financial relief.”
Griffith said the rising cost of food, including supply and logistics, was beginning to have a chronic impact in remote communities, leading to food insecurity for many Australians.
“Increasing costs of food in rural, remote, and regional Australia significantly impacts the access to food in these communities.
“Geographical location and supply and demand issues are now resulting in unavailability of food in some areas.
"In a prosperous nation such as Australia, families should be able to afford their basic food needs, so we look forward to a strong response from the Government next week.”