The clothing, footwear and personal accessories sector recorded a 14.3% year on year sales increase in March, after being the hardest hit during the pandemic.
Department stores grew 1.3%, according to figures released by the Australian Bureau of Statistics (ABS).
Australians spent $33.6 billion in stores and online in March, eclipsing the previous record of $33.3 billion set in November 2021, when consumers enjoyed the Black Friday/Cyber Monday sales and were shopping early for Christmas.
Australian retail sales reached their highest levels on record, with March trade increasing 9.4% compared to the same time last year and increasing 1.6% compared to the previous month, according to the ABS figures.
The results were greeted by retail industry leaders with enthusiam, but tempered by caution about what lies ahead.
Australian Retailers Association CEO Paul Zahra said it was a "phenomenal result."
"However, spending challenges loom for the months ahead as cost-of-living pressures begin to impact family budgets," he added.
“Whilst it’s pleasing to see record levels of retail sales for March, we know that increased consumer prices that are flowing through the economy have contributed to the result.
“The eased Covid restrictions have also helped lift sales, and businesses are now able to trade closer to their full potential, with the relaxation of close contact isolation requirements helping to alleviate staffing pressures.
“We’re encouraged by the performance of clothing, footwear and personal accessories, which recorded a 14.3% year on year sales increase, and cafes, restaurants and takeaway food (up 13.2%) – two sectors that have been amongst the hardest hit through the pandemic. We are also pleased to see year on year growth in March for department stores (up 1.3%).
“Despite the increased pressure that’s set to be placed on family budgets in the coming months, with further interest rate rises predicted, we’re expecting sales to remain reasonably robust given the high savings rates of Australians throughout the pandemic, and the ongoing potential for domestic tourism spending to flow onto retail for the remainder of the year,” Zahra said.
National Retail Association (NRA) CEO Dominique Lamb also welcomed the strong sales figures.
“This is a good result for March, and although the recovery is still patchy it indicates that retail is heading in the right direction,” she said.
However, Lamb said yesterday’s interest rates announcement, coupled with looming increases in superannuation and award wages from July 1, meant that the good times could be shortlived.
Queensland was the nation’s strongest performer with 3.4 per cent growth for the month, while South Australia went backwards by 0.7 per cent.
“These varying results demonstrate that inflationary pressures are not uniform across the nation, and show the need for the RBA to wait and see the impact of its first rate increase before moving again," said Lamb.
The National Retail Association is Australia’s most representative retail industry association, with more than 28,000 shop fronts nationwide. It has been serving businesses in the retail and fast food sectors for close to 100 years.