Retailers are hoping the Reserve Bank of Australia (RBA) will hold interest rates as they look toward a recovery in Christmas after experiencing minimal sales growth in October, driven by food-related purchases.
Australian Bureau of Statistics (ABS) data showed that retail turnover amounted to $35.77 billion during the month, up 1.2 per cent from the year-ago period.
Food sales rose 3.3 per cent to $14.23 billion while cafes, restaurants, and takeaway sales climbed 4.6 per cent to $5.4 billion. Department store sales increased 0.4 per cent to $1.91 billion.
National Retail Association (NRA) director Rob Godwin said that the Christmas season will be a make-or-break for retailers.
“The decline in spending, despite the Halloween discount buzz, indicates shoppers are being more conservative about where they spend their money, and the RBA’s snap decision to raise interest rates in November was ill-advised,” said Godwin.
“We implore the new RBA Governor Michele Bullock to hold interest rates in December to give retailers a fighting chance this Christmas. Consumers can expect competitive bargains to ramp up in the 12 days before Christmas as retailers pull out every trick in the book to make up for a flat year of sales.”
Sales fell in the household goods, clothing, footwear, and accessories categories, attributed to the decline in discretionary spending.
“Spending on essentials remains consistent, while discretionary goods categories are clearly taking a hit,” said Paul Zahra, CEO of the Australian Retailers Association.
“Shoppers are increasingly feeling the crunch of the cost-of-living crisis and interest rate increases, making it a challenging time to be a discretionary retailer.”
All states recorded growth, with WA posting the highest increase – of 3.5 per cent to $4.03 billion.