EOFY sales not enough to tempt shoppers to spend more
Shoppers cut back on unnecessary spending as household budgets feel the squeeze, new data shows
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Retail spending fell at end-of-financial-year sales in June, as cost of living pressures continue to make an impact.
Data released today by the Australian Bureau of Statistics showed a drop of -0.8 percent in retail spending in June, with department stores bearing the brunt of the damage, with a fall of -5.0 percent. This was followed by other retailing (-2.2 percent) and clothing, footwear and personal accessory retailing (-2.2 percent).
In further signs of belt tightening in household budgets, spending at cafes, restaurants and takeaway services saw a marginal decrease of -0.3 percent.
The data follows on from results collated in May, where spending increased by 0.8 percent.
Head of ABS retail statistics Ben Dorber said the mixed results indicated that consumers were continuing to grapple with cost-of-living pressures.
“There was extra discounting and promotional activity in May, leading up to mid-year sales events,” he said. “This delivered a boost in turnover for retailers, but that proved to be temporary as consumers pulled back on spending in June.”
He noted that while eating out had become less frequent, food spending in general was consistent, if slightly altered.
“Over the last 12 months, growth in food-related spending has mostly been driven by rising food prices,” Mr Dorber said. “We saw in Wednesday’s release of the Consumer Price Index (CPI) that food prices rose again in the June quarter.
“Consumers are responding to these price rises by changing to cheaper brands or by simply buying less.”
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The federal budget has rattled property investors. But the biggest mistake isn’t the tax changes, it’s the conclusion many are drawing from them.
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The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”
Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
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