The retails sales in Australia have been suffering a decline, and things remained the same in the first month of this year. This problem is part of the increasing list of worrisome indicators related to the strength of the average household spending.
The Australian Bureau of Statistics (ABS) reports that sales rose by just 0.1% during January in seasonally adjusted terms, and this figure is below the modest expected increase of 0.3%.
The non-food sales which are considered as a useful gauge on discretionary spending trends were reported to be flat after a significant decline of 1.1% in December. These sales did not bounce as expected.
How does this affect you? Well, these statistics suggest that households are reducing their spending on the little luxuries of life. The lifestyle of an average household is thus suffering due to the decline in retails sales.
As compared to last year, the total increase in retails sales have grown by just 2.6%, which is the weakest result since last year’s May. The growth was worse for the non-food sales, with just an increase if 1.7%.
The non-food sales have not been this low since October 2017. After the analysis of the monthly data, the ABS states that performance through the different categories can be considered “mixed.” Spending on cafes, takeaway outlets and restaurants as well as food increased by 0.3%, 0.7%, and 0.3%, respectively. On the other hand, department stores saw a fall of 2.1% while clothing, personal accessories and footwear saw a fall of 0.3%. Household goods sales were flat, pointing towards the decline in the housing market in the country, as well as the multi-decade lows being experienced in housing turnover recently.
The figures were equally mixed throughout different territories and states, so they did not provide a comprehensive understanding of how declining home prices are affecting the monthly consumer behaviour.
Experts have suggested that two trends have emerged from the falling home prices:
- Despite the presence of a relatively strong labour market in both Victoria and New South Wales, the retail growth has still slowed down significantly. New South Wales has, in fact, become the slowest growing retail market currently.
- Retail sales growth has also slowed down in many discretionary items including household goods. Somehow, this category is especially sensitive to variations in economic conditions. The conditions throughout the economic sector are getting worse as many households have to delay purchases on necessities like fridges, televisions and motor vehicle purchases.
Declines in the retail sales and household savings, along with the wake wage growth mean that the retail sector has been and continues to be faced with intense pressure. This means that the Australian economy is facing problems, which ultimately have an impact on every citizen of the country. It also is affecting the local government jobs in Melbourne, making them lesser accessible to many people.