Australian retail sales recorded another modest growth in February despite the continued impact of cost-of-living pressures and economic uncertainty.
Retail sales rose 3.6 per cent year-on-year to $37.1 billion, extending the 3.8 per cent uplift in January, data from the Australian Bureau of Statistics shows.
The ‘other retailing’ category – which includes cosmetics, sports, and recreational goods – recorded the biggest increase at 5.5 per cent, followed by food with a 4.08 per cent improvement.
Spending was also up 3.37 per cent at cafes, 3.23 per cent at department stores, and 2.89 per cent in the household goods category. Clothing and accessories were relatively flat with a 0.4 per cent uptick.
Western Australia led the gains with retail sales up 6.22 per cent, followed by Victoria (3.98 per cent), South Australia (3.79 per cent) and Queensland (3.71 per cent).
Australian Retailers Association (ARA) chief industry affairs officer Fleur Brown said the result was “solid” despite the continued impact of cost-of-living pressures and economic uncertainty on consumer behaviour.
“We know household budgets remain tight, and retailers are operating in a highly competitive and volatile environment with rising business costs. Any signs of stability in consumer spending are a welcome boost to business confidence, but we remain far from a retail recovery,” Brown continued.
According to National Retail Association (NRA) interim CEO Lindsay Carroll, consumer sentiment is on the uptick as wages are up and inflation is down.
“However, retailers are still struggling. Business insolvencies have shot up in the last couple of years, and the Federal Budget was a missed opportunity for the government to show the ailing sector a bit of love,” she added.
Both the ARA and NRA are urging the government to offer improved support measures for the sector.
CreditorWatch’s chief economist Ivan Colhoun said retail sales were reasonably soft in February, but seasonal patterns have changed. He suggests the Reserve Bank of Australia (RBA) should not wait too much longer to cut interest rates again if it wishes to maintain full employment.
On Tuesday, the RBA announced it would keep the cash rate on hold at 4.1 per cent amid the threat of US tariffs and growing global uncertainty.
This story originally appeared in our sister publication, Inside Retail.
