Retail sales slid 0.4 per cent in March, which followed a 0.2 per cent rise in February, and one per cent lift in January.
The modest February increase was in part attributed to Eras tour spending, including stronger department stores and clothing sales.
Compared with March last year, sales by businesses as tracked by the Australian Bureau of Statistics lifted 0.8 per cent.
Spending during Taylor Swift's Eras tour in Melbourne and Sydney boosted February figures. (Dean Lewins/AAP PHOTOS)
ABS head of retail statistics Ben Dorber said it was the weakest growth on record, outside the pandemic and introduction of the GST, when comparing turnover to the same time of the year before.
"Consumers pulled back on retail spending in March as cost of living pressures remained high," Mr Dorber said.
Higher mortgage repayments, a growing tax take and elevated prices have been taking a toll on Australian consumers and leading to weakness in retail sales, especially across discretionary goods and services.
Food retailing was the only industry to record growth over the month, lifting 0.9 per cent.
The official retail sales count follows stronger-than-expected inflation data that dimmed hopes of interest rate cuts in coming months and had some economists warning further hikes could not be ruled out.
Yet Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the weak retail data was further confirmation consumer demand was "very restrained" due to financial pressures.
"Consumers pulled back on retail spending in March as cost of living pressures remained high," Ben Dorber, ABS head of retail statistics— Australian Bureau of Statistics (@ABSStats) Visit https://t.co/IoeJM2KIyH pic.twitter.com/OrvMo4v7AlApril 30, 2024
The 0.8 per cent increase in spending compared to a year earlier was "a very soft trend", he said, when considering population growth.
"Strong price inflation for essentials like health and education and higher rent and mortgage costs are still putting the squeeze on household budgets and discretionary spending," Mr Langcake said.
Clothing, footwear and personal accessory retailing fell 4.3 per cent and department store sales declined 1.6 per cent.
Mr Dorber said the falls across these categories suggested the Taylor Swift-inspired boost in turnover for fashion and accessory retailers last month was only temporary.
Household goods retailing fell 1.4 per cent in March, other retailing dropped 0.3 per cent, and cafes, restaurants and takeaway food services slid 0.2 per cent.
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