Australia’s clothing, footwear and accessories sector peaked at $3.079 billion in February 2024, new data from the Australian Bureau of Statistics (ABS) revealed.
This is a 4.2 per cent lift on the prior month of January, and a 4 per cent lift on February 2023, and represents the largest growth across the retail industry - driven primarily by high-calibre pop artists Taylor Swift and Pink who toured Australia in February.
Department stores came in second-highest month-on-month at 0.8 per cent, which was then followed by cafe’s, restaurants and takeaway at 0.5 per cent.
Household goods retailing was the lowest, with a 2.2 per cent drop in monthly sales.
The modest lift in fashion sales drove an overall retail turnover lift of 0.3 per cent in February 2024, following a 1.1 per cent lift in January 2024 and a fall of 2.1 per cent in December 2023.
ABS head of retail statistics Ben Dorber said fashion and accessory retailers added to the turnover lift with promotions towards the Taylor Swift Eras tour.
"Seven sold-out Taylor Swift concerts in Sydney and Melbourne boosted retail spending this month, with over 600,000 Swifties flocking to these events,” ABS head of retail statistics Ben Dorber said. “This led to increased spending on clothing, merchandise, accessories and dining out.
“Looking past the temporary and one-off impact of the Taylor Swift concerts, underlying growth in retail turnover was up only 0.1 per cent in trend terms. After a period of higher volatility from November through to January, underlying spending has stagnated.”
National Retail Association director Rob Godwin said when you factor in price inflation on top of the stagnated growth, it clearly shows a sector in need of significant help.
“We simply can’t rely on a US pop star to ensure our retail economy is reaching its potential,” Godwin said.
“The government needs to start listening to the concerns of businesses, starting with the spiralling cost of wages. Otherwise, the sector will continue to decline and jobs and businesses will simply disappear.”
Godwin said it would be a mistake for the government to interpret the seasonally adjusted February sales increase of 0.3 per cent as anything other than dire for Australian business owners.
“These figures show that the retail sector is struggling, and can’t simply ‘shake it off’ no matter what kind of spin the ABS puts on the numbers,” Godwin said.
“Businesses are struggling with spiralling overheads, including power prices and insurance, and now they also see the Government pushing for a very significant increase in the upcoming minimum wage review.”
In year-on-year terms, overall retail sales lifted by 1.6 per cent in February 2024 compared to February 2023, totalling $35.8 billion nationwide.
Clothing led the charge in year-on-year sales growth for February 2024, followed by department stores, cafes, restaurants and takeaway and other retailing.
Food trading saw modest growth, while household goods hit a decline of 2.2 per cent.
Australian Retailers Association (ARA) CEO Paul Zahra said whilst the pattern of low growth is concerning for retailers as they battle the increased cost of doing business, February's retail sales results are in line with expectations.
“Australians are still cutting back on spending as the lag effect of interest rate rises continues to take hold,” Zahra said. “While food spending remained constant, there has been a shift towards more affordable and value-oriented products in recent months.
“The ongoing cost-of-living pressures and interest rate ramifications are making it a challenging period for those in the discretionary retail sector.
“Any growth that has been achieved is mostly being fuelled by the Australian population increases of 2.5% across the past year. We also understand that significant events like Taylor Swift concerts can go some way to stimulate spending.”
Zahra said pressures from higher costs of doing business continue for retail – from leasing, supply chain and energy costs to higher wages and the higher costs of goods and services.
The ARA is hopeful the RBA may be on trajectory to cut rates from around mid-year following its cash rate pause at 4.35 per cent in March.
“With inflation decreasing and retail expenditures weakening, a mid-year interest rate cut would certainly alleviate the pressure on the retail industry and Australian households,” Zahra said.
Meanwhile, the impact of Taylor Swift and Pink is also noted in movements across states and territories, with Victoria and New South Wales recording large rises of 0.6 per cent and 0.7 per cent respectively. The Northern Territory also reported a lift of 0.7 per cent, with South Australia, Western Australia and the Australian Capital Territory hovering between 0.2-0.3 per cent. Queensland and Tasmania fell into negative growth for the month.