Retail sales strong on the back of major sporting events

Australia’s love of sport has helped lift consumer spending for January as cost-of-living pressures ease.

Bumper crowds at the Australian Open tennis and summer of cricket lifted retail spending in January.

Retail turnover rose by 0.3 per cent in January 2025, according to the Australian Bureau of Statistics, as Aussies looked for a day out at their favourite sporting events.

This followed a volatile Black Friday and Cyber Monday period where November retail sales soared 0.7 per cent but December retail sales fell 0.1 per cent.

Crowds at the Australian Open tennis helped boost consumer spending. Picture: NewsWire / Ian Currie

ABS head of business statistics Robert Ewing says the pick up in retail spending since mid-year has largely been discretionary, with January being the exception and the rise mostly driven by food-related spending.

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

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

Overall, food-related spending bounced back in January following falls last month, with rises in cafes, restaurants and takeaway food services (up 1.1 per cent), while food retailing rose 0.7 per cent.

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said while spending overall was subdued for January, the outlook going forward remained positive.

Household goods sales fell for the first time in four months. Picture: NewsWire/ David Crosling

“The labour market is in a strong position, and inflation has fallen materially, leaving real incomes in good shape,” he said.

“Cost-of-living subsidies are providing a transitory boost to spending, while February’s interest rate cut helps shore up the outlook.”

Commonwealth Bank economist Harry Ottley said 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.

“For context, the average annual growth rate for trend nominal retail trade from 2000‑2019 was 4.7 per cent, higher than the current rate of 4.1 per cent.”

KPMG chief economist Brendan Rynne said Tuesday’s data provided evidence of a stronger economy, which could be bad news for mortgage holders.

“This figure, together with the hotter-than-expected inflation figures last week, supports our forecast that the RBA will not follow up its recent rate cut with another in May,” Mr Rynne said.

“The data also support the RBA’s guidance to the market to be cautious about the scope for further rate cuts in the near term.”

Last week’s CPI data showed headline inflation remained steady in the month of January, at 2.5 per cent, but the all important trimmed mean inflation rate that the RBA uses went up from 2.7 to 2.8 per cent.

Spending in most non-food industries rose January, led by other retailing, up 2.4 per cent, and clothing, footwear and personal accessory retailing, which grew 2.0 per cent.

This was partly offset by a large fall in household goods retailing, which dropped 4.4 per cent as retailers stopped discounting items.

“The fall in household goods follows four straight rises driven by widespread discounting activity around Black Friday and Cyber Monday sales events,” Mr Ewing said.

Retail turnover rose in six of the eight states and territories. The only exceptions being NSW, were spending fell 0.3 per cent in the month of January, and the Northern Territory where sales were flat.

Victoria drove the biggest contribution to national growth, up 0.6 per cent, largely on the back of the Australian Open.

In annual terms, WA came in first, with Victoria retail spending growth coming in second.

Originally published as Retail sales strong on the back of major sporting events