Retail businesses in a slump as new ABS figures reveal drop in sales

The Australian Bureau of Statistics recorded a 3.9 per cent drop in retail sales for December, with CBD businesses already experiencing the effects of softened customer spending

Shoemaker Andrew McDonald is holding on tight to the wealthier half of his customer base, who pay anywhere between $2000 to $3600 for a custom-made pair of shoes, as inflation and cost-of-­living pressures clamp the everyday shopper’s wallets shut.

Located in The Strand Arcade in Sydney’s CBD, the Andrew McDonald Shoemaker shop is forecast to make about $20,000 in sales for January, significantly lower than its $30,000 to $35,000 average for the month.

And his situation is not isolated, with the Australian Bureau of Statistics on Tuesday revealing a 3.9 per cent drop in retail turnover for December.

The 60-year-old said his sales and clientele were divided equally between older customers who opted for made-to-order shoes and younger customers who purchase ready-to-wear shoes that range from $500 to $800.

“The clientele who are buying made-to-order are not really affected by the vicissitudes of the economy because the shoes are expensive and they’ve always got money. It’s the ready-to-wear customers who are the ones feeling the pinch and they either think they can wait or get something cheaper,” he said.

“The people who are most ­affected are my younger customers between the ages of 25 and 40 ­because they’re the ones dealing with a huge mortgage.”

Mr McDonald said he had to pass on costs to customers given financial pressures of his own.

“I have an investment property and the mortgage payments have really gone up,” he said.

Rox Gems and Jewellery ­designer Rei Robinson-Mai said despite strong foot traffic in the arcade, sales were down even compared to the normal January lull experienced in retail.

“It’s been quite busy in the ­arcade and the streets, but it’s not been like that in the shop,” Ms Robinson-Mai said.

Women’s clothing store Attik has recently closed its Manly outlet, with manager Brittany Clark, seeing the effects of softened ­retail spending.

“I think because of inflation … we have noticed that our sales have decreased quite a bit,” the 29-year-old said.