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Retail spending flattens as consumers curb spending, ABS data shows


Australian retail spending for January fell below expectations and is unlikely to improve until interest rates drop, according to economists.

By Miranda Brownlee 9 minute read

Australian retail turnover rose 1.1 per cent in January 2024, according to figures released by the Australian Bureau of Statistics this week.

This followed a fall of 2.1 per cent in December 2023 and a rise of 1.5 per cent in November 2023.

AMP deputy chief economist Diana Mousina said the increase in retail sales for January was much lower than consensus expectations for a 1.5 per cent rise.

“Retail spending has been volatile over the past 3 months as consumers brought forward December Christmas-related spending to November to make use of the Black Friday discounting, so there is a need to look through the volatility over the past few months,” said Ms Mousina.

“The value of retail spending is virtually flat versus September 2023 and growth in retail volumes is negative.”

CreditorWatch chief economist Annette Thompson said given that retail trade jumps around quite dramatically between November, December and January, the trend data is important to consider.

“As the ABS suggests, there is no underlying growth in the retail trade by Australian consumers,” she said.

Mr Thompson said similar trends were reflected in CreditorWatch’s Business Risk Index data for January which indicated that the value of invoices for its B2B clients has seen a sustained fall since September 2023.

“Businesses are clearly feeling the impact of reduced consumer spending, even if they are not direct retail traders,” said Ms Thompson.

“It is unlikely we will see a decent recovery in turnover until we get closer to a drop in the cash rate. This is not likely to happen before Q3 2024.”

The ABS data showed that turnover rebounded in all non-food industries following last month’s falls with clothing, footwear and accessory retailing seeing the largest rise at 2.4 per cent.

This was followed by household goods retailing (2.3 per cent) and department stores (1.7 per cent). Other retailing (1.7 per cent) also rose by 1.7 per cent and was the only non-food industry to see a larger rise in January.

In good news for cafes and restaurants, turnover rose 1.3 per cent for food-related industries, cafes, restaurants and takeaway food services, following four consecutive monthly falls.

“However, in total turnover terms, Australians still spent less at cafes and restaurants than they did in September 2023. Similarly, overall retail turnover is only 0.2 per cent higher than it was in September on a seasonally adjusted basis,” said Ms Thompson.

“Australian consumers are clearly watching their spend and making adjustments due to high housing costs for the roughly 60 per cent of Australians who rent or have a home loan.”

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Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

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