Summer of sport a winner for retail sales in January, new ABS figures show

Bumper crowds at Test cricket and Big Bash League matches helped to lift retail spending in January.

Retail sales rose in line with market expectations of 0.3 per cent in January, led by food-related spending at large-scale events, which also included the Australian Open tennis in Melbourne.

The latest data from the Australian Bureau of Statistics on Tuesday revealed total spending hit just over $37 billion, 3.8 per cent higher than a year ago.

Following falls in December, spending in cafes, restaurants and takeaway food services, and food retailing grew 1.1 per cent and 0.7 per cent, respectively.

“Bumper crowds across large-scale events, including record attendance at the Australian Tennis Open and cricket events, lifted spending in catering services,” ABS head of business statistics Robert Ewing said.

“Food retailing also rebounded in January, particularly in Victoria where supply chain disruptions negatively impacted December supermarket spending.”

Most non-food industries also rose, boosted by clothing, footwear and personal accessory retailing (up 2 per cent) and department stores (up 0.6 per cent).

Commonwealth Bank economist Harry Ottley noted while consumer spending increased in January, it could be due to heavy discounting.

“It is also worth nothing the recent improvement in spending growth is coming from a weak base,” he said.

“This is especially true when considering high population growth and the weakness in the volume of spending.”

CreditorWatch chief economist Ivan Colhoun said it was another “modestly favourable” outcome for retail sales as low unemployment and the effects of tax cuts support consumer confidence and spending.

The February interest rate cut should help at the margin in coming months too, he added.

“However, the big issue for economies and retailers is the Trump tariff storm clouds that threaten to significantly dent business and consumer confidence,” Mr Colhoun said.

“There is already evidence of this in US manufacturing business surveys released overnight.”

ANZ senior economist Adelaide Timbrell said the retail sales data provided further evidence for the nascent consumer recovery, with the six-month annualised growth accelerating to 4.7 per cent in January, from 4.2 per cent in December.

Australian Retailers Association chief industry affairs officer Fleur Brown said the January figures were a positive contrast to spending patterns throughout 2024.

“The Reserve Bank of Australia’s April decision will be crucial in shaping consumer confidence and trading conditions,” she said.

“Whilst interest rate decisions tend to have a lag effect on consumer spending, we are cautiously optimistic we will see some improved trading conditions ahead.”

Retail turnover rose in most States and Territories, led by Tasmania’s 1.1 per cent growth. This was followed by South Australia (0.9 per cent), Victoria (up 0.6 per cent) and the ACT (up 0.7 per cent). WA posted 0.4 per cent growth.

NSW fell 0.3 per cent and the Northern Territory was flat.