The Foschini Group is the latest fashion retailer company to say that Australia’s economy seems to be stabilising.
This comes from TFG’s latest trading update, which shows that sales in its Australian market – consisting of brands such as Connor, Tarocash and YD – contracted by 2.8 per cent for the 13 weeks ending June 28.
“TFG Australia continued to face difficult trading conditions with sustained high inflation and interest rates impacting the consumer,” the South African-based company shared.
“Sales were 2.8 per cent lower in AUD, with a mixed performance throughout the period in a highly promotional market.”
The group added that Australian sales contracted by 4.1 per cent in AUD in the three weeks ended July 19.
“Although trading conditions remain challenging, the economy appears to be stabilising with two quarter-per cent interest rate reductions in recent months.”
TFG’s Australian market slip comes as the group’s total sales lifted by 11.5 per cent in ZAR, driven by a 57.7 per cent sales boom in London and a 5.2 per cent sales lift in Africa.
“Global and domestic business conditions have been volatile due to uncertainty surrounding proposed trade tariffs, hindering broader economic recovery and resulting in subdued GDP growth of just 0,1% for Q1 2025.”
TFG is not the only global fashion company reporting stabilising conditions in Australia. Culture Kings’ parent company A.K.A. Brands also reported local stabilising.
A.K.A. Brands CEO Ciaran Long shared this same sentiment earlier this week. This came amid the group’s latest trading update, showing its AU/NZ sales lifted just 0.1 per cent in Q2 this year compared to the same time last year. This is down from a 6.2 per cent surge in sales for the local region Q1, with that off the back of local revenue declines in 2024 for AU/NZ.
All this rhetoric comes as household spending remains relatively subdued in recent months, according to new data from the Australian Bureau of Statistics (ABS). IN June, household spending lifted just 0.5 per cent. This follows a 1.0 per cent rise in May and a flat result in April.
ABS head of business statistics Robert Ewing said people buying more goods drove the overall rise in household spending in June.
"Goods spending rose 1.3 per cent as households spent more on food, new vehicles and electronics," he said.
"Meanwhile, spending on services fell by 0.5 per cent, after two months of growth."
Six of the nine spending categories rose in June. This rise was led by furnishings and household equipment (up 2 per cent), clothing and footwear (up 1.6 per cent) and food (up 1.5 per cent).
Alcoholic beverages and tobacco (down 2.4 per cent), hotels, cafes and restaurants (down 0.8 per cent) and health (down 0.3 per cent) were the only categories that fell.
Household spending was 4.8 per cent higher than the same time last year. Recreation and culture (up 7.9 per cent), food (up 7.5 per cent) and health (up 7.2 per cent) saw the largest percentage rises in the 12 months to June.
The Reserve Bank of Australia is set to meet next week, with many economists predicting a 25 basis point cut to interest rates.