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Cost of Living Pressures Begin to Affect the Retail Industry

Retail Trade Figures for April 2023 were released last week, indicating a seasonally adjusted increase across the retail sector of 4.3% compared with April 2022 as cost of living affects retail increase

Household Goods was the only category to continue to see a decline in revenue (-2.2%); however, this category was coming off a high base with households working from home, and spending increased significantly during the COVID-19 pandemic. 

Retail ABS Retail Trade - April 2023

The remaining categories continued to see seasonal, year-on-year growth with +13.5% across the Cafes, Restaurants and Takeaway Food categories. The Food category and the Department Stores have grown steadily at 6.39% and 6.13%, respectively.

Cost of Living Affects Retail industry
Cost of Living Affects Retail industry in Australia

With consumers now heavily focussed on the Cost of Living pressures, growth continues in the Food category; however, with the increased cost of living affects retail, consumers are walking away from their weekly grocery shop with fewer items.

This will also impact the other categories as discretionary spending reduces.

State by State Snapshot

All States continue to experience growth in retail sales during April 2023; however, only three states (South Australia, Western Australia and Australia Capital Territory) reported sales growth greater than 6%.

These seasonally adjusted results continue to outline the increased Cost of Living pressures are now impacting New South Wales (+4.59%), Queensland (+1.53%), Victoria (+4.66%) and Tasmania (+2.88%) as revenue growth in these states continue to slow.

Further, the National seasonal growth rate of +4.33% is also the lowest reported sales increase in 18 months.

Cost of Living Affects Retail Brisbane
Cost of Living Affects Retail in Australia

Argus Asset Services have a detailed understanding of the retail and commercial landscape in Australia. This coupled with our extensive relationships and commercial networks will ensure that we find you the right solution to minimise the cost of living affects retail assets.

By utilising our retail asset management services, proprietary software and our team’s knowledge, we can thoroughly analyse your current asset and identify opportunities in all areas.

Get In Touch with our team to learn more about our specialist services.