Australian Retail Sales: April 2023 - Hanging On

About the author:

Author name:

By Alexander Mees

Job title:

Co-Head of Research and Senior Analyst

Date posted:

29 May 2023, 7:00 AM

Sectors Covered:

Gaming and Retail

• Australian retail sales in April 2023 were flat month-on-month (m/m), which was broadly in line with the consensus forecast of a 0.2% increase. Sales were 4.2% higher than in April last year, the slowest rate of annual growth in nearly two years and below the rate of inflation.
• Interestingly, the best performing categories were both highly discretionary: Clothing and Footwear (+1.9%) and Department Stores (+1.5%). On a year-on-year (y/y) basis, Clothing and Footwear sales were 5.0% higher than last year and Department Stores were 6.5% higher.

Retail sales were flat month-on-month in April

Preliminary data from the ABS show that Australian retail sales were A$35.3bn in April, in line with March and 1.4% below the record monthly high of A$35.8bn in November 2022. The flat m/m growth rate was lower than the +0.4% m/m growth in the previous month.

On a geographic basis, the best m/m growth was in Western Australia (+1.0%) and South Australia (+0.6%) and the largest declines were in Tasmania (-1.5%) and New South Wales (-0.4%).

Sales were up 4.2% year-on-year

Retail sales were up 4.2% y/y, down from 5.4% growth in March continuing the slowing trend in growth.

Annual growth continues to trend below inflation (~7%) which suggests that transaction volumes are in decline. +4.2% was the lowest rate of y/y growth since September 2021.

A slowdown but (still) not falling off a cliff

Clothing and Footwear was the strongest performing category (+1.9% m/m), following negative growth in the previous month (-0.7%). This contrasts with fashion retailer Universal Store’s comments during the week that it had seen a ‘tightening’ of customer demand in April and into May.

Spending on Food & Drink and Eating Out were both very slightly down m/m (- 0.1% and -0.2% respectively), but are still up a lot on last year (+6.3% and +13.3% respectively).

Household goods remain the toughest category

Household goods spending was down -1.0% m/m and down -4.9% y/y. This was the only category to post negative growth on a y/y basis.

Figure 1: Retail sales (A$m)

Source: Morgans, ABS

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