Australian shoppers were not put off by rising interest rates and prices in July as retail sales rose a solid 1.3% from June – a strong indication they ignored a lot of the gloom and doom.
In driving sales higher, shoppers spent another record amount – $34.7 billion – a peak that owed a lot to rising prices than it did demand and volumes.
Retail sales are now 16.5% above where they were in July, 2021 (when they fell 3.2% in one of the deep lockdowns in NSW and Victoria which has distorted the size of the annual rise).
Much of the big rise though is due to higher prices which have been come clear in the monthly data since April.
But the rise in July supports updates from retailers in the current June 30 reporting season with many (Michael Hill and Lovisa yesterday, for example) reporting a solid gain in sales growth in the first six to seven weeks of the new financial year. JB Hi Fi and Kmart also had a solid start in July.
July’s rise was the highest for four months and belied some forecasts for a small rise or a flat outcome after the strength earlier in the year.
The Australian Bureau of Statistics (ABS) said the July increase came after a weak 0.2% gain in June and the 0.7% rise in May.
Ben Dorber, head of retail statistics at the ABS, said, “Turnover rose in five of the six retail industries in July 2022. This shows that, despite cost-of-living pressures, households are continuing to spend.
Department stores had the largest rise, up 3.8% (reversing June’s fall), followed by clothing, footwear, and personal accessory retailing (3.3 %), cafes, restaurants, and takeaway food services (1.8%), other retailing (1.6%) and food retailing (1.2%).
Household goods’ retailing turnover fell for the third time in four months, down 1.1% in July.
Turnover rose 1.8% in Victoria and the ACT; 1.6% in WA, 1.3% in NSW, 1.2% in South Australia, 0.7% in the Northern Territory and 0.4% in Queensland.
Tasmania was the only state where retail turnover fell, down 0.3% cent. This was the state’s first fall in 2022.
