The recent Australian Bureau of Statistics figures on the state of retail across the nation show that consumers are still carefully watching their discretionary spending, according to a leading industry body.

While the Australian Retailers Association (ARA) applauded many of the ABS’s most recent findings – including the 2.3 per cent year-on-year increase in retail sales – it also noted that there is still a long way to go when it comes to encouraging consumers to have confidence in the market.

Speaking about the results, ARA executive director Russell Zimmerman said that the relatively low (0.1 per cent) increase in retail spending during the month of May “illustrates that consumers are still holding on to their purse strings and discretionary spending remains tight”.

Consumers are saving and making cutbacks wherever they can, he added, noting that cafes and takeaway food services were particularly challenged by negative growth (-0.6 per cent) during the same month.

He attributed the areas with the largest amount of growth – such as footwear and clothing – to the change in season, as consumers are more likely to shop out of necessity in the current climate.

“It is evident there is a lack of consumer confidence in the whole economic situation in Australia,” he said.

“Retailers are facing significant cost pressure at the moment,” explained Mr Zimmerman. These include a 2.6 per cent rise to minimum wage, a 0.25 per cent increase in superannuation as well as an increase in the weekend penalty rates for retailers in Australia.

Tighter controls on eligibility for 457 visas – which has long been an attractive way for organisations of all kinds to attract the best and brightest talent from overseas – will also impact the sector, he said.