Retail trade has recorded its first decline of the year, according to data released by the Australian Bureau of Statistics today.
Spending throughout October fell by 0.2 percent following nine consecutive months of recorded growth, which has confirmed that rate rises, growing energy costs and inflation have had an impact on household spending.
National Retail Association Interim CEO Lindsay Carroll said the fall in turnover was imminent as the economy caught up with increasing costs.
“We’re finally starting to see the cost of goods and services out-perform the demand. Households are feeling the impact of higher bills and are reeling in their discretionary spending.
“Department stores, clothing and household goods suffered the largest fall in spending last month, dropping 2.4 percent, 0.6 percent and 0.5 percent respectively.
“Presumably consumers are cutting back in these areas in preparation for spending big during the Christmas and holiday season.
“Food retailing rose by 0.4 %, the only sector that saw an increase in consumer spending last month. Given the rising costs of food and produce and ongoing weather events along the east coast, this result is not surprising as consumers need to fork out more cash to afford necessities.”
Ms Carroll said consumers have had to adapt to rising costs which has curtailed consumer spending.
“We are finally seeing the impacts of the RBA’s rate rises, which has become a balancing act for many households. Consumers are adjusting their budgets to be able to spend over the holiday season and carry them through the start of 2023, when we expect rate rises to have an even greater impact.
“Inflation is here to stay, particularly with the prospect of increased wages from the IR Bill set to pass this week. It is time for the RBA shift gears and address the supply-side challenges that are exacerbating costs.”
The National Retail Association is the voice of modern retail, representing more than 60,000 shopfronts nationwide. It has been serving businesses in the retail and fast food sectors for close to 100 years.
For more information please contact the NRA’s media unit at firstname.lastname@example.org