More grim news for Aussie retailers

Australians are still holding back on spending, with retail sales unchanged in July and below expectations, according to the Australian Bureau of Statistics.

Economists had expected a 0.3 per cent rise after growth of 0.5 per cent in June and 0.5 per cent in May.

Results were mixed across the industries, with most recording a fall or flat result following rises in June.

“After rises in the past two months boosted by mid-year sales activity, the higher level of retail turnover was maintained in July,” ABS head of retail statistics Ben Dorber said.

Clothing, footwear and personal accessory retailing (-0.5 per cent) had the largest fall, followed by department stores (-0.4 per cent) and cafes, restaurants and takeaway food services (-0.2 per cent).

Household goods retailing and other retailing were both unchanged (0.0 per cent).

“The fall in turnover for clothing and footwear retailers and department stores came after higher spending during recent mid-year sales events,” Mr Dorber said.

“Household goods retailers held onto large gains in turnover in recent months.”

The only industry that rose in July was food retailing (0.2 per cent).

Oxford Economics head of macroeconomic forecasting Sean Langcake said the flat results was “a relatively strong outcome”.

“These data are the first read we have on household spending since income tax cuts came into effect on 1 July,” he said.

“The slightly stronger-than-expected result has likely been boosted in part by the increase in disposable income tax cuts have delivered.”

Mr Langcake predicted Australians would start spending more in the coming months.

“We expect momentum in consumer spending will improve over the second half of the year as real wage growth improves further and tax cuts ease pressure on household budgets, but growth will still be relatively subdued,” he said.

Western Australia was the standout performer for retail spending, with turnover up 0.2 per cent in July and 4.6 per cent compared with a year ago.

Nationally, retail trade has grown 2.3 per cent over the past year.

More to come