Yesterday, the Australian Bureau of Statistics released figures showing retailers have recorded their strongest January sales growth in six years.
After three months of decline, retail spending rose 0.9 per cent across the board in January to $21.59 billion, seasonally adjusted.
The market had expected a 0.4 per cent rise. The ABS figures showed the strongest growth in the ``other'' retail sector, which includes newsagents, florists and bookshops, with spending up 2.6 per cent to $3.045 billion.
Paddington business Black Cat Books and Cafe owner Stephanie Hogan said the figures reflected her experience.
``We're looking at about a 2 per cent increase in our books and probably just on 1 per cent for our cafe,'' she said.
She said her customers were beginning to realise they had more discretionary spending money than they used to.
``I think people have gone without for quite a long time,'' she said. ``Treats that aren't massively expensive, like coming out for a cup of coffee and browsing through books, are picking up.''
Ms Hogan said her store had bucked the trend of consumers turning to e-books and online shopping.
``We sell online but we've found our main pick-up has been through the actual store,'' she said, adding there had been a ``huge increase'' in the kids' book section.
``I think kids have been more isolated from the e-book market and parents are more likely to want their kids to have a physical book,'' she said.
Department stores miss out on surge in retail spending
``Anything to do with kids reading their books has been very, very positive.''
The ABS figures also showed strong rises in the household goods sector, with spending up 1.3 per cent, and cafes, restaurants and takeaways, up 1 per cent.
The only exception to the positive figures was in department stores, which saw spending fall by 0.6 per cent.
CommSec economist Savanth Sebastian said overall it was the fastest January spending growth since 2007, before the global financial crisis hit.
He said the surprise sales surge resulted from lower interest rates and improved consumer confidence.
``Share markets have rallied, super is looking better, house prices are looking solid and those drivers are enticing consumers to part with some hard-earned cash,'' he said.
Mr Sebastian said it looked like retail spending had turned a corner and would continue to rise.
But Australian National Retailers Association president Margy Osmond said retailers needed more rate cuts to lift consumer confidence further.
She said while improvements in the housing market and equities had helped lift confidence, the January figures may also have been boosted by federal government payments to families through the school kids bonus.
But Black Cat's Ms Hogan said January had felt like a breakthrough.
``It's a huge relief,'' she said. ``I think a lot of business owners are probably feeling we've been hanging in there, treading water, waiting for a resurgence. It's starting to come through.''
