Tightening the belt on fashion

While the monthly decline was in line with 2023, a big difference compared to last year is the very weak level of spending.

The yearly change in non-food retail spending is weak

Spending was significantly lower than last year for most non-food retail spending categories.

Fashion retailing has been one of the weakest performers and ANZ-observed spending saw it down 11 per cent year on year in January. Although the monthly decline was a touch smaller than in 2023, down 35 per cent versus 37 per cent in 2023.

ANZ-observed spending on fashion

Electronics were down 2 per cent year on year in January, and monthly growth was broadly in-line with last year.

ANZ-observed spending on electronics

Department store spending did show some resilience, down just 1 per cent year on year in January. Monthly growth in department store spending was slightly better than in 2023, down only 39 per cent month on month in 2024 compared to 41 per cent in 2023.

ANZ-observed spending at department stores

Furniture bucked the downward trend, with monthly spending rising in January.

It is one of the few non-food retail categories not normally hit by the post-holiday-sales slump. Furniture spending was up 5 per cent month on month in January, compared to 3 per cent month on month in January 2023. But levels are still down 8 per cent year on year.

ANZ-observed spending on furniture

Spending is expected to remain weak throughout the first half of this year as households face inflation and high housing costs from interest payments combined with costs such as rapidly rising rents.

Spending should pick up in the second half as household incomes get a boost from tax cuts, fiscal support, moderating inflation and potentially an interest rate cut.

Madeline Dunk is an Economist & Adelaide Timbrell is a Senior Economist at ANZ