Australian Retail Sales: May 2022 - Vertigo

About the author:

Author name:

By Alexander Mees

Job title:

Head of Research

Date posted:

30 June 2022, 8:00 AM

• Australian retail sales rose to new heights in May 2022. According to preliminary data from the ABS, retail sales last month were $34.2bn, up +10.4% year-on-year (y/y) and up +0.9% month-on-month (m/m). This was a new all-time record. On a two-year basis, retail sales in May 2022 were +18.7% higher than in May 2020. This was the fifth month in a row of positive m/m sales growth, while the y/y rate of growth was the fastest in more than a year.
• All retail categories except Clothing and Footwear grew positively on a m/m basis, while all retail categories without exception grew positively on a y/y basis. The best growth on a m/m basis was in Department Stores (+5.1%) and on a y/y basis was in Eating Out (+16.2%). Every state and territory except the ACT and Queensland saw positive m/m retail sales growth. The best m/m growth was in South Australia (+1.9%).
• There is no doubt that higher prices played an important part in the strong growth in retail sales last month. Consumers are not necessarily buying that much more, but they are certainly spending a lot more. That said, the pace of retail sales growth appears to be outstripping the rate of inflation, implying the consumers is yet to pull back. Nonetheless it seems inevitable that inflationary pressures on household budgets will see a reaction in due course.

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Eating Out continues to grow the fastest

All major retail sales categories were in growth in May 2022 compared to May 2021. The strongest y/y growth, however, was in Eating Out (+16.2%) and Clothing and Footwear (+14.6%).

On a m/m basis, Department Stores and Eating Out were the best performers (+5.1% and 1.8% respectively).

Apparel in negative territory against tough comps

Clothing and Footwear was the only category in negative territory on a m/m basis in May 2022 (down -1.4%), after having been the best performer in April.

Household Goods underperformed in April (down -2.7%) but was positive in May (up +0.4%). On a y/y basis, the slowest growth was in Food and Drink (+6.2%).

Australia outperforming the US and the UK

Accelerating retail sales in Australia in May contrasts with a solidly negative performance in the UK last month. Retail sales there fell -5.7% y/y in May.

Retail sales are much more positive in the US, where sales growth accelerated slightly to +8.1% y/y, but this is still below the rate of growth in Australia.

Figure 1: Retail sales in the UK, the US and Australia

Source: ONS, US Census Bureau, ABS

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