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“Off the back of strong sales, the cost of living pressures and constant interest rate rises have delivered tougher trading conditions over the last couple of months.”
He was more upbeat about trading conditions for the rest of this year, saying there will be a point where the consumer outlook improves.
“We expect these headwinds to persist until we enter peak trade and [will] then see customer optimism return with the new season and the run in to Christmas with new collections and even more services and experiences around the country.”
National retail turnover figures from the Australian Bureau of Statistics (ABS) released on Friday showed overall spending declined by 0.8 per cent in June, but the department store sector suffered the largest fall in turnover, down by 5 per cent for the month to $1.8 billion.
The ABS said that weaker spending at end of financial year sales contributed to the drop in overall turnover.
Economists said the weaker turnover figures revealed just how challenging trading conditions had become.
“In a sign of just how much pressure consumers are under, retail spending fell in every category except food retailing, which only increased by 0.1 per cent in dollar terms,” CreditorWatch’s chief economist, Anneke Thompson, said in a note.
Scott Fyfe said he believed the tough conditions would continue but improve in the lead-up to peak trading later this year. Credit: Elke Meitzl
“Given inflation figures for food items are well above this figure, it is highly likely that volume figures, even in the non-discretionary category of food, will have gone backwards when quarterly trade volume data is released this Thursday.”
Consumer data from NAB released on Monday points to how consumers are continuing to re-prioritise discretionary spending to manage their budgets, with two out of three Australians planning a holiday either cancelling or rescheduling their plans.