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Consumer spending begins to wane as retail sales slip in February

Retail sales fell 1.1 per cent in February compared a month prior, but rose 8.7 per cent when compared to the year before, according to the Australian Bureau of Statistics’ latest data.

According to ABS director of quarterly economy wide surveys Ben James retail restrictions in Victoria and Western Australia drove the fall, with trade restricted for a five day period in both states during the month.

Food retailing saw a drop in every state, though remains above figures seen a year prior, while results remained mixed across other industries.

NRA chief executive Dominique Lamb said the result demonstrates that retailers shouldn’t be complacent, as the high levels of consumer spending are beginning to wane.

“[These figures] underline the point that the sector and the economy more broadly are still in for a challenging period ahead,” Lamb said.

“Both JobKeeper and the [JobSeeker] coronavirus supplement are due to expire in less than two weeks and this will likely see a further decline in discretionary spending.”

ARA chief executive Paul Zahra agreed, and said that while these fiscal measures had been incredibly successful in keeping businesses and the economy afloat, their impact hasn’t been felt uniformly.

“Our CBS and travel retailers are in deep pain, with international tourists and students still missing and office occupancy rates – in Melbourne and Sydney in particular – still very low,” Zahra said.

“That’s had a devastating impact on city retailers – there are less people going to their favourite cafes, shopping during their lunch breaks or even going out for dinner and drinks after work. The wind up of JobKeeper will only add to that.”

Prime Minister Scott Morrison said last week the measures “must end”.

“I am absolutely certain that JobKeeper has saved lives in this country and so it has been a tremendously successful program, but even tremendously successful programs must gear into the next phase and that is where we are heading now,” the Prime Minster said.

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