Retail sales for April 2024

Early Easter is no help for retail

Australian retail sales rose 1.2% in April 2024. To adjust for the noise of the timing of Easter we also look at the combined March-April results which shows sales growth of only 1.3%. Department stores and fashion have had the most notable slowdown over the Easter trading period. Supermarket sales are also soft considering data suggests higher inflation in March-April. We forecast subdued retail sales growth trends to continue to June 2024, with a mild pick up for the back-half of calendar 2024.

What we’re seeing and hearing in retail

  • End of season clearance starts early: Retailer David Jones went on sale a week earlier than last year. Other retailers have followed with deeper promotions offered in late May and early June, adding risk to gross margins.
  • Wages decision from Fair Work Commission at 3.75%: The announced the minimum wage decision for FY25e will result in total wage rate growth of 4.25% including superannuation, ahead of likely sales growth in FY25e.
  • Weather conditions: April was warmer and dryer than last year while May was also warmer and wetter. This may be adversely impacting fashion sales.

Sub-sector insights

  • Supermarkets: Supermarket sales fell 0.2% YoY in April vs March growth of 4.2%. Sales growth for March-April was 2.0% and ABS CPI for Food & Beverages was 3.6% for the same time period. Volumes are in decline.
  • Liquor: Liquor sales fell 7.4% in April, compared with 5.4% growth in March. The two months combined sales fell 0.9%. Liquor volumes remain under pressure as they revert to pre-pandemic levels.
  • Takeaway food: Takeaway food rose 1.9% with cafés and restaurants lifting 4.1%. On an Easter adjusted basis both were up low single digits.
  • Electronics: Electronics fell 0.5% in April, an improvement on the drop in March of 6.6%. Adjusted for Easter, electronics are lower 3.7% vs the combined Easter period in the prior year.
  • Hardware and furniture: Hardware sales rose 4.1% in April. Sales were up 1.4% on a combined March-April basis. Furniture sales were down 0.4% in April and fell by -3.4% across the two months.
  • Recreational goods: Recreational goods rose 3.7% in April but are up just 0.8% on an Easter-adjusted basis for March and April combined.
  • Department stores: Department stores fell 5.1% in April and were 1.1% lower on an Easter adjusted basis. Sales have turned negative for the sector over the past two months. David Jones started sales a week earlier this year. We have heard that Kmart’s sales trends have slowed recently.
  • Fashion: Clothing fell 1.8% and footwear and accessories were up 0.8%. Easter adjusted clothing was -2.5% and footwear and accessories rose 0.7%. Foot Locker revealed negative comp sales in Australia during the three months to 4 May 2024. Our feedback is that Nike sales are weaker.
  • Online retail: Online retail grew 18% in food and 9% in non-food. Easter adjusted these were 14% and 4% higher. This is the first decent period of growth for online non-food since early 2023.

Chart: Australian retail sales long-term trends

Adjusted three month growth for leap year impact in February 2024.
Source: ABS, MST Marquee

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