March retail sales barely rise as Taylor Swift effect evaporates

(Source: Bigstock.)

Australian retail sales in March remain subdued despite an early Easter, only rising 0.8 per cent year over year to $35.6 billion.

Australian Bureau of Statistics data showed that other retailing, which include cosmetic, sports and recreational goods, grew 2.4 per cent, the strongest growth across all categories during the month.

Food sales went up 2.1 per cent while cafes, restaurants and takeaway rose 1.2 per cent.

However, household goods slid 3.1 per cent while clothing, footwear and accessories fell 0.4 per cent. Department stores dipped 0.3 per cent.

“The Taylor Swift-inspired boost in turnover for fashion and accessory retailers last month has proved to be temporary with an instant reversal this month,” said Ben Dorber, ABS head of retail statistics.

“Underlying retail turnover has been flat for the past six months and was up only 0.8 per cent compared to March 2023. Outside of the pandemic period and introduction of the GST, this is the weakest growth on record when comparing turnover to the same time in the previous year.”

Australian Retailers Association CEO Paul Zahra said that merchants are expecting the decline in discretionary spending and cost of doing business pressure to persist for most of the year.

“More than 6 million Australians are paying mortgages, and this remains the biggest financial stressor for these households,” said Zahra.

National Retailers Association deputy CEO Lindsay Carroll also cast doubts on the future of the retail sector, noting how high interest rates and low consumer confidence have caused a cost-of-trading crisis.

“We call on the federal government to put downward pressure on energy and insurance costs so retailers suffering from scarce consumer spending can keep more of what they earn,” said Carroll.

All states saw sales improvement except NSW as its turnover declined 0.9 per cent to $11.06 billion.

Meanwhile, the Northern Territory saw the highest sales growth of 4.4 per cent with retail sales amounting to $331 million.

Western Australia came next as its retail sales climbed 2.5 per cent to $4.02 billion followed by Queensland, sales of which jumped 2.2 per cent to $7.36 billion.

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