Billions of dollars worth of clothes, appliances, toiletries and furniture risk being sent to landfill as Australians watch their dollars amid the cost of living crunch.
New data from charity Good360 reveals a plunge in retail sales, exacerbated by high inflation, could be creating Australia’s “next environmental crisis”.
The national accounts data released on Tuesday revealed discretionary spending fell 0.5 per cent in the June quarter, marking the third consecutive fall – led by a 2.5 per cent quarterly decrease in spending on household goods.
The charity, which has received more than $390m in new, unsold goods from businesses including Big W and Harvey Norman to distribute to thousands of charities and disadvantaged schools across the country, says there has been a 20 per cent increase in donations over the last 12 months as retailers struggle to sell goods.
Good360 has warned that without government help, it may not have the capacity to deal with the increasing volume.
Founder Alison Covington said that although the charity was redistributing millions of dollars worth of items to vulnerable Australians, there could potentially be billions of dollars of unsold consumer goods headed for landfill.
“The increased cost of living is not only creating higher demand on charities providing relief to people under economic distress, but as retail sales decline there are untold volumes of unsold products heading for waste,” Ms Covington said.
“We believe the volume of unsold goods, such as clothes and toys, heading for landfill could increase even further later this year as Australians continue to rein in their spending and retailers change their seasonal product lines.
“A Deloitte Access Economics report we commissioned in 2022 found $2.5bn of unsold household goods are wasted by businesses every year. In the 18 months since, we have seen retail sales plunge and donations spike, suggesting there could be billions of dollars worth of valuable consumer goods heading to landfill instead of going to people in need.
“That stock is valuable now to people doing it tough.”
Australian Retailers Association chief executive Paul Zahra said many retailers had diversion strategies to keep unsold goods out of landfill.
“The retail sector takes sustainability seriously … (and) while many retailers are playing their part by donating to Good360, for example, there’s more governments can do to help support the sector tackle the environmental issues that could be created if retailers are forced to send unsold stock to landfill,” he said.
Ms Covington warned that charities could not do it all alone, saying it was “crucial” the government step in and help redirect goods away from landfill.
“Just $1m in funding could help divert $20m in unsold consumer goods away from landfill and to people who need it, which is a fantastic outcome for both people and the planet,” she said.
“It’s non-inflationary. It’s not stimulating cash into the economy.
“It is a non-inflationary way the government can help tackle the cost-of-living crisis … and could avoid creating a potential environmental crisis.”