Retail spending in Australia grew 4.9 per cent in the year to September, as households continued to face mortgage and cost-of-living pressures.
The slowdown raises concerns about trading conditions for retailers ahead of the year-end peak season, according to the Australian Retail Council (ARC).
The organisation’s analysis showed retail spending reached $39.91 billion in the year to September, up 4.9 per cent from a year earlier, compared with annual growth of 5.6 per cent in August. Growth varied across retail categories.
Other retailing, which includes pharmaceutical and cosmetic retailing, increased 8.1 per cent, followed by cafes, restaurants and takeaway food services, up 7.4 per cent.
By comparison, spending at department stores and large online retailers increased 1.7 per cent. Food retailing rose 3.3 per cent, close to the 3.2 per cent increase in food and non-alcoholic beverage prices over the same period, according to the September Consumer Price Index (CPI). This indicates that food retail spending growth largely reflected price increases.
ARC chief economist Glenn Fahey said weakening consumer confidence was beginning to affect retail activity. Consumer sentiment fell sharply in September and deteriorated further in October, with pressure on household spending expected to continue in the months ahead.
The Reserve Bank of Australia’s (RBA) latest forecasts also point to subdued household spending. 6 per cent previously.
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