Aussies splurged an extra $68m on hospitality amid the Matildas’ meteoric rise and World Cup mania gripping the nation, new figures reveal.
Despite consumers facing a cost-of-living crunch, shoppers shunned the supermarket checkout and instead headed out to pubs and clubs, ate out at cafes and restaurants, and ordered more takeaway, pushing up spending on hospitality to a record $5.42bn.
The figures were revealed in fresh retail turnover data which showed Australians went on an unexpected spending spree in July.
“The rise in July was boosted by additional spending at catering and takeaway food outlets linked to the 2023 FIFA Women’s World Cup,” Australian Bureau of Statistics head of retail statistics Ben Dorber said.
Retail spending bounced back to grow by 0.5 per cent in the month, eclipsing market expectations for turnover to rise by just 0.3 per cent, after it collapsed by 0.8 per cent in June.
But economists expect the jump in sales to be short-lived, as soaring inflation and high interest rates flow through to households and the wider economy.
Despite the July rebound, monthly retail sales have remained relatively stagnant since January, increasing by just under 1 per cent over the past six months.
Commonwealth Bank economist Harry Otley said the growth in retail trade remained sluggish.
“Stripping out food retailing, retail trade is just 0.4 per cent higher compared to a year ago, highlighting strain on discretionary spend,” Mr Otley said.
“The outlook for retail trade remains soft, as the fixed rate roll-off continues and cost-of-living pressures persist.”
With the Reserve Bank board set to meet next Tuesday, the retail spending numbers are unlikely to deter the bank from its outlook on interest rates, as high borrowing costs continue to slow the economy.
In good news for borrowers, traders now ascribe a 97 per cent chance that the Reserve Bank will keep rates on hold at its September meeting, which will be outgoing governor Philip Lowe’s last.
Mr Dorper added the bigger-than-expected rise in retail spending was due to shoppers making up for the weaker-than-usual end-of-financial-year sales period.
Spending across most categories rose, with turnover in department stores, and clothing, footwear and other accessories, all increasing, but sales in household appliances fell 0.2 per cent.
Australian Retailers Association chief executive Paul Zahra said growing cost-of-living pressures had driven retail spending towards more essential items.
“While spending on takeaway continues to be reasonable – shoppers are likely opting for value options such as quick-service restaurants to ease pressure on their budgets,” he said.
“Shoppers are becoming increasingly conscious of cutting back on spending, making it a challenging time to be a discretionary retailer.”