Retail hit pause in April but this hidden trend could signal a comeback

Retail spending took a slight dip in April 2025, falling 0.1 per cent month-on-month according to the latest figures from the Australian Bureau of Statistics (ABS). But dig a little deeper and there’s a more hopeful picture for small businesses—consumer spending is still up 3.8 per cent compared to the same time last year.

Retailers across the country rang up $37.2 billion in sales in April, with standout year-on-year growth in ‘other retailing’ (cosmetics, sports and rec gear), food retail, cafés and takeaways, and household goods. The fashion and department store categories were flatter, but still held steady, despite an unusually warm April delaying winter wardrobe sales.

Year-on-year winners:

Other retailing: +5.3 per cent

Cafés, restaurants, takeaways: +3.9 per cent

Household goods: +3.8 per cent

Food retail: +4.2 per cent

Month-on-month movers:
Despite the annual growth, short-term figures show retail sales were down slightly from March’s 0.3 per cent rise. The biggest month-on-month drops were in clothing, footwear and accessories (-2.5 per cent) and department stores (-2.5 per cent), while food service and household goods helped balance the scale with moderate gains.

Small business insights from the ARA

Chris Rodwell, CEO of the Australian Retailers Association (ARA), says the steady growth across categories is reassuring—but the road ahead is far from smooth.

“Retail businesses of all sizes remain vulnerable to the dual headwinds of global market volatility and enormous costs of doing business,” Rodwell said.

“We’re encouraged by the ongoing year-on-year growth, but with consumer confidence under pressure, small retailers need more than just resilience—they need relief.”

Rodwell says the modest interest rate cut delivered by the Reserve Bank of Australia in May may help buoy spending confidence, but it won’t be enough on its own.

“We need to see substantially more cash rate reductions to generate the kind of retail recovery Australia needs.”

He also urged governments to support retailers through policy reform, including cuts to red tape, productivity measures, and assistance to help manage soaring operational costs like rent, wages, insurance and energy.

What this means for small business owners:

If you’re in apparel or seasonal goods, prepare for slower starts and flexible stock strategies. Focus on delivering experiences to your customers. Despite a drop in spending, food and hospitality businesses are showing resilience as consumers opt for more affordable luxuries, such as dining out, over larger purchases. However, as consumers are still showing caution, a focus on loyalty-building, community, and perceived value are more powerful than ever.

States like WA (+6.2 per cent) and Victoria (+5.1 per cent) are seeing stronger growth than NSW (+1.7 per cent). So tailor your promotions and spend accordingly.

While the April dip may look like a warning sign, the broader trend shows Australians are still spending, just more selectively. For small business owners, it’s about staying nimble, informed and customer-focused as we move into the colder months.

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