Spending on clothing stagnates amid rising interest rates

Clothing spending stagnated in the face of inflationary pressures and rising interest rates in May, as sales fell 0.2% from a year ago according to MasterCard SpendingPulse.

The service measures in-store and online retail sales across all payment methods, with all categories seeing growth outside of apparel.

Fuel and commodities saw the largest sales increase (+7.4%), followed by electronics (+5.6%), home furnishings (+4.4%), groceries (+ 4.1%), accommodation (+ 3.5%) and jewelery (+ 1.6%). %).

Australian Retailers Association CEO Paul Zahra said while it is pleasing to see retail sales continue their positive trajectory across most categories, the country is entering a challenging economic environment.

“A generation of homeowners is experiencing its first interest rate hikes, while the cost of food and basic necessities is rising, impacting family budgets. However, we have yet to see these cost pressures impact retail spending, which is a positive indicator that Australians in the near term will be able to weather the current inflationary challenges,” he said.

“Household savings remain above pre-pandemic levels, cushioning the blow from higher prices we are seeing across the economy. Although discretionary buying is likely to be hit by As cost of living challenges persist, we remain optimistic that overall consumer spending will remain reasonably optimistic for most of the year.

“Retailers are currently experiencing one of their busiest months of the year with booming mid-year sales, which the ARA predicts will lead to increased spending $8.8 billion as consumers pick up bargains and retailers clear excess inventory. Despite the current positive trajectory of retail sales, we also recognize that many companies are facing record cost pressures, which is impacting their performance.”

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