The Australian Bureau of Statistics (ABS) has released the latest figures on retail spending for June, which reveal a mid-year spending dive of 0.8 per cent.
The drop follows a 0.8 per cent rise in May, driven by the lead-up to mid-year sales, and a 0.1 per cent fall in April.
June’s results do represent a 2.3 per cent increase compared to figures seen in June 2022.
City Index Senior Market Analyst Matt Simpson said the latest figures almost “cement” a rates pause by the RBA next week.
“We’re finally seeing rate hikes begin to bite with the weakest retail spend in six months,” he said.
“Department stores spending is a notable drag at 5 per cent, and I think this now cements a pause, given the weaker inflation report earlier this week.”
ABS Head of Retail Statistics Ben Dorber said the boost in retail turnover seen in May has proven to be temporary, with a pullback on spending in June.
“Retail turnover fell sharply in June due to weaker than usual spending on end-of-financial-year sales, and this comes as cost-of-living pressures continue to weigh on consumer spending,” he said.
There were decreased sales experienced across all non-food industries, with department stores recording the largest fall of five per cent, followed by a 2.2 per cent drop in clothing, footwear, and personal accessory retailing.
Household goods also fell by 0.1 per cent, marking the eighth monthly decline in turnover in the past 12 months.
Food-related spending was mixed, with cafes, restaurants, and takeaway food services dropping by 0.3 per cent, despite a rise in food retailing by 0.1 per cent.
“We saw in Wednesday’s release of the Consumer Price Index (CPI) that food prices rose again in the June quarter, consumers are responding to these price rises by changing to cheaper brands or by simply buying less,” Mr Dorber added.
“To see the full effect of consumer prices on recent retail turnover growth, it will be important to look at quarterly retail sales volumes which we release next week.”
All eyes will now shift to the RBA’s next rates decision due next week.