Most retail categories saw double-digit decline in April

The majority of retail categories in Australia saw double-digit percentage declines in April, although sales increased slightly overall due to higher spending on groceries and restaurants in the current environment of high price inflation.

According to the latest Mastercard SpendingPulse which measures in-store and online retail sales across all forms of payment, Australian retail sales increased 2.6 per cent year-on-year in April, which in real economic terms is a backstep given the consumer price index has been running at around 7 per cent.

Spending on groceries and restaurants actually outpaced inflation at 8.5 per cent and 8 per cent respectively, but double-digit declines were seen for jewellery (down 21.1 per cent), home furnishings (down 17.5 per cent), electronics (down 15.9 per cent) and lodging (down 14.8 per cent).

Meanwhile, retail spending on apparel was down 9.1 per cent and spending on fuel and convenience dropped 8.9 per cent.

Australian Retailers Association CEO Paul Zahra says the results suggest the country’s cost-of-living crisis is now deterring retail spending.

"Most categories are recording significant declines now compared to 2022, with households across Australia saddled with mounting cost-of-living pressures and consecutive interest rate rises," Zahra says.

"We believe that April’s sales growth is predominately driven by price increases on food essentials which make up the lion’s share of retail spending."

He explains the latest results follow a 2022 period when retailers thrived with low interest rates and high household savings leading to robust spending growth.

"It isn’t surprising to see these declines today when compared to a successful period in 2022," he says.

“With discretionary purchasing slowing significantly, it will be a challenging environment for businesses – especially those on tighter margins. Retail businesses are simultaneously battling rising operating costs associated with increasing cost of debt, fuel, energy, labour, supply chains and rent.”