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[Music] it's been sales season with end ofe discounts starting early it's felt really staggered over the last I'd say 3 months which is a really long time with a catch people are doing it pretty tough I think more so than having plenty of money to spend I think inflation is huge and en rampant at the moment I think it's insane which is why our jump in retail spending was a slight surprise retail spending Rose 0.6 of a% from April to may but spending is only up 1.7% for the year and that's not even half of what prices have risen by most of that recent boost was in clothing and Footwear with customers drawn in by big discounts with tight household budgets the promise of a good deal can make a difference when there's not a market event such as a Mother's Day or change of season getting colder or a end of season sale period we have had to use discounts a little bit more to entice customers to come into stores Alicia Hopkinson runs the company behind Saba Jag and the brand clothing our Olympic athletes Sportscraft you can see that across the market people are not spending more overall and so it's definitely a competitive game out there of who's doing the best job customers are being more Discerning about what they buy so it may be a t-shirt versus a it uh and so our job really is just to make sure that we can outfit our customers so they're spending more with us as they leave the store so the sales worked but expose a bigger problem when we take that step back it's quite clear that the retail sector overall remains quite weak and that many households sort of need these discounts and these incentives in order to to go out and spend like they used to economists say households are buying fewer goods and services than they used to retail volumes per cap have now fallen for seven consecutive quarters and down about 5.7% from their Peak so what we're seeing right now is a collision between a cost of living crises and a cost of doing business crises so while the discounts may have pleased customers they haven't eased the pain of some of our nation's largest employers so it is exceptionally tough to be a retail at the moment it was we're seeing some slight uptake in those categories that have been discounted heavily revenue revenue may be a little bit better than what we would normally expect but of course profit may be another question together what remains to be seen is whether the jump in spending translates to inflation certainly inflation doesn't come down as quickly as the RBA might have hoped The Reserve Bank has been lifting interest rates to try and get inflation down but it's stopped working the biggest increases in costs have been in essential non-discretionary sectors like food Fuel and housing the consumers can't really spend less on The Reserve Bank board next meets in August still fighting inflation but knowing any lift in rates would unleash an intergenerational and political screaming match well I think it's quite possible we could be dealing with a a rate hike um in August I think that's certainly on the card based on just how nasty the the RIS inflation Figures were no easy bargain there for