March retail sales record 5.4% year-on-year growth
Retail sales recorded 5.4% year-on-year growth in March 2023 – again bolstered by cafes, restaurants and takeaway, and food categories after a similar result in February.
According to figures released today by the Australian Bureau of Statistics (ABS), shoppers spent more than $35.3 billion across the country in March.
There were significant year-on-year sales increases for cafes, restaurants and takeaway, food. department stores, clothing, footwear and accessories showed more modest growth.
All states and territories recorded growth year-on-year, led by South Australia (up 8.2%) followed by the ACT (up 7.9%), Tasmania (up 7.1%) and Western Australia (up 6.9%). New South Wales (up 5.7%) and Victoria (up 5.6%) were closely matched in growth, followed by Northern Territory (4.7%) and Queensland (up 2.7%).
Australian Retailers Association (ARA) CEO Paul Zahra said whilst some categories continue to show reasonable sales growth year-on-year, overall retail sales are slowing as cost-of-living pressures bite.
“Cost-of-living pressures typically have a lag effect on retail, and we are now witnessing the impact of months of continued interest rate rises and price rises on consumer spending.
“Household goods were the most obvious discretionary category affected by the reduction in spend in March. This demonstrates the new spending restraint amongst many Australians but also reflects the stronger growth in that category through the pandemic period.
“We can see a softening of year-on-year growth within clothing footwear and accessories and Department stores in the March results. It is important to note that in essential categories like food, inflationary price increases are mostly driving retail spending growth.
“Yesterday’s RBA decision to raise interest rates will create deep stress for many households and businesses. We are hopeful that the second half of the year will usher in more stable trading conditions. Next week’s Federal budget will be vital in providing support measures for the most vulnerable sections of our community including small businesses.
“It is good to see continued bounce-back for the hospitality sector – many of whom are small businesses that were deeply affected by the pandemic period. However, we are mindful that price increases are also impacting those in the food business and will be putting pressure on margins,” said Mr Zahra.
“It continues to be a truly challenging period – with retailers having to contend with continued rising costs, labour shortages and supply chain issues,” said Mr Zahra.
