Today’s retail trade data revealed a slight increase in the rate of spending in September 2023, partly driven by the release of the new iPhone and a warm start to spring, which boosted spending on hardware, gardening supplies and clothing.
Even though retail trade remains subdued by long term standards, this bump in retail spending may be the final evidence the RBA needs to convince it to increase the cash rate at the Melbourne Cup Day meeting on 7 November.
There was no growth in spending recorded in the café, restaurant and takeaway food sector, highlighting the precarious nature of business conditions in this sector. CreditorWatch’s September Business Risk Index data shows the business failure rate in this sector is already at 6.80%, far higher than the business failure rate of all other industries.
This sector has been struggling with high food, labour, utilities and insurance prices, but now has the added challenge of plateauing demand, just as we are entering the busy Christmas months. Today’s data may well see the failure rate of this sector climb even further.
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Chief Economist, CreditorWatch
Anneke joined CreditorWatch as Chief Economist in April 2022. She is a specialist researcher and commentator on issues impacting the credit industry, SMEs and the broader economy, conducting regular presentations to corporate groups. She is also a media spokesperson for CreditorWatch, regularly appearing on national television and in syndicated media. Anneke is also the Managing Director of Clio Research and formerly the National Director and National Head of Research at Colliers International Australia. She has also worked at NAB and Jones Lang LaSalle.
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