Holiday spending drives 7.5% year-on-year retail sales growth

Australian retail turnover declined 3.9% in December 2022, according to figures released by the Australian Bureau of Statistics (ABS). This follows a 1.7% rise in November 2022.

ABS Head of Retail Statistics Ben Dorber says: “This is the first monthly fall in retail turnover for 2022, following eleven consecutive monthly rises. Retail turnover remains elevated at its sixth highest level in the series and was up 7.5% through the year.

“The large fall in December suggests that retail spending is slowing due to high cost-of-living pressures. Retail businesses reported that many consumers had responded to these pressures by doing more Christmas shopping in November to take advantage of heavy promotional activity and discounting as part of the Black Friday sales event,” Mr Dorber said.

“Seasonal spending patterns continue to change and evolve around Black Friday and the holiday period.

“While there was a strong rise in original terms for December, as is expected in the lead up to Christmas, this year’s rise in original terms was smaller than those typically seen in past December months. This has led to the large seasonally adjusted fall,” Mr Dorber said.

Turnover declined in industries previously boosted by November Black Friday sales. Department stores had the largest fall, (-14.3%), followed by clothing, footwear and personal accessory retailing (-13.1%), household goods retailing (-7.8%) and other retailing (-4.6%).

Food retailing was the only industry to record marginal growth in December (+0.3%), while cafes, restaurants and takeaway food services was relatively unchanged from November.

Retail turnover declined across all states and territories, with the majority down by more than three%.

“The latest Consumer Price Index showed that prices continued to rise strongly in the December quarter. To see the effect of consumer prices on recent turnover growth, it will be important to look at quarterly retail sales volumes which we will release next week,” Mr Dorber said.

Retail sales have been boosted by record Christmas and Boxing Day trading to mark 16 consecutive months of year-on-year growth in December 2022 – a strong increase of 7.5% on the same time the previous year – according to figures released by the Australian Bureau of Statistics (ABS).

As shoppers celebrated the first restriction-free Christmas since 2019, there were strong year-on-year sales increases for cafes, restaurants, and takeaway (up 25.46%) with department stores (up 11.1 %) and clothing, footwear and accessories (up 7.4%) also recording strong growth.

SA led year-on-year growth (up 10.9%) followed by NSW (up 9.0%), with Victoria also marking a notable increase. (up 6.5%).

Australian Retailers Association (ARA) CEO Paul Zahra says whilst the results remain impressive for retail, the margin between inflation and sales growth is narrowing.

“Today’s data marks 16 consecutive months of year-on-year sales growth, which is an enormous achievement for retailers considering the disruption and challenges of the past few years,” Mr Zahra said.

“When you combine the strength of the record November retail sales, predominately driven by the success of Black Friday/Cyber Monday with December retail sales, this would account for a record holiday trade of $70.3 billion.

“Australia saw a bumper Boxing Day spending spree, which bolstered sales to notch an impressive year-on-year increase,” he said.

“December’s results remain strong in the face of adversity, with economic headwinds proving to be a hurdle. With inflation hitting a post-1990 peak, it appears to be driving a significant proportion of sales growth.”

Mr Zahra flagged that figures were beginning to stabilise after periods of fluctuation.

“Due to the uneven impact of the post-pandemic recovery across the sector, sales figures have fluctuated quite dramatically. We’re starting to see a return to pre-pandemic trends.”

Australian Bureau of Statistics Retail Trade Data – December 2022