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Turnover rises above expectations in May thanks to food costs and sales events.
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Retail rebounds on discretionary spending, dining out
29 June 2023
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Retail turnover rose above expectations at 0.7 per cent in May driven by an increase in dining out and a lift in discretionary spending.
The ABS figures reveal a rebound in May retail trade following a flat result in April 2023 but the increase came in well ahead of the 0.1 per cent consensus forecast.
ABS head of retail statistics Ben Dorber said: “This latest rise reflected some resilience in spending with consumers taking advantage of larger than usual promotional activity and sales events for May.”
The largest rise (+2.2 per cent) came from the “other retail” category thanks to strong growth across a range of businesses from online-only retailers to florists, from pharmaceuticals and cosmetics.
The ABS said the May resulted was lifted by an early start to end-of-financial-year sales along with Mother’s Day and the Click Frenzy Mayhem sales event.
“Just as we saw during the November Black Friday sales last year, consumers appeared to take extra advantage of discounting during large sales events in May in response to cost-of-living pressures,” Mr Dorber said.
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Household goods retailing had a modest rise (0.6 per cent) following three straight monthly falls although turnover remained 4.4 per cent down over the past year.
The ABS said clothing, footwear and personal accessory retailing (-0.6 per cent) along with department stores (-0.5 per cent) were the only categories to fall in May, following extra spending in April on winter clothing in response to the cold and wet weather.
However, more were eating out in May with turnover up 1.4 per cent at cafes, restaurants and takeaway outlets, hitting a record level after a fall in April.
Food retailing rose again, by 0.3 per cent, to record 16 monthly increases over the past 18 months.
“Most of the growth in food-related spending this year has been driven by rising prices,” Mr Dorber said. “This was seen in yesterday’s release of the monthly Consumer Price Index, which showed that food prices rose 7.9 per cent in the 12 months to May.
“The largest contributor to this increase was from meals out and takeaway food, as businesses passed on their higher costs through price rises.”
Retail turnover rose across most of the states and territories. The Northern Territory (+1.6 per cent) recorded the largest rise and is now at its highest level. Tasmania recorded the only fall in turnover, down 0.1 per cent.
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