Retail turnover remained relatively flat in April 2024, inching up just 0.1% month-on-month and increasing 1.3% compared to April 2023, the latest ABS retail trade figures show.
While the clothing, footwear and personal accessory category dipped 0.7% in April, department stores and household goods categories experienced a slight lift of 0.1% and 0.7% respectively.
The relatively earlier Easter and different timing of school holidays across the country added volatility in turnover in March and April, according to ABS head of retail statistics.
“Underlying retail spending continues to be weak with a small rise in turnover in April not enough to make up for a fall in March. Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending,” he said.
CreditorWatch chief economist, Anneke Thompson said Westpac consumer confidence data confirms that Australian consumers remain extremely despondent.
“Although Treasury forecasts that income tax cuts and cost of living measures announced in the budget will assist in a recovery in real disposable income over the 2025 financial year, it remains to be seen if this will flow on to increased spending in the retail sector,” she said.
“Even if real disposable incomes do increase with income tax cuts, and weakening labour market and rising unemployment tends to make Australian consumers uneasy about overspending. It is likely, then, that Australian consumer confidence will remain weak even if they have more disposable income.
“A recovery isn’t likely until we see two or three cuts to the cash rate, as only then will mortgage holders start to feel more confident that they have some breathing space in their monthly budget.
“Given we are unlikely to see the second or third cut to the cash rate until the final quarter of 2025 financial year, we expect that insolvencies in the retail sector will increase, especially amongst smaller, discretionary retailers. The retail trade sector has already recorded a 35% increase in insolvency rates over the year to April 2024.”