Thursday, June 20, 2024

Retail spending grows in November

Australian retail sales increased 5% in November compared to the same time last year, according to the latest Mastercard SpendingPulse.

Most retail categories continued to record significant year on year sales growth as we cycle the impact of the 2021 Omicron wave.

Lodging recorded the biggest increase in trade in November, up 21% compared to 12 months prior. This was followed by grocery (up 10.3%), restaurants (up 8.9%), apparel (up 8.6%), fuel and convenience (up 4.8%) and electronics (up 2.6%).

There were, however, year on year falls for home furnishings (down 4.1%) and jewellery (down 1.2%) off an elevated level of sales in the previous year due to the pandemic.

Australian Retailers Association (ARA) CEO Paul Zahra says the results confirm that Christmas continues to come earlier for retailers with consumers motivated to get in ahead of price increases and to avoid supply chain disruptions.

“While we’ve seen the overall year-on-year sales growth slow, these remain really pleasing results in a challenging economic environment. The growth is driven by a host of factors including the incredible growth in Black Friday and Cyber Monday sales in Australia; price increases are also a factor which are also driving Australians to spend to get in ahead of inflation,” he says.

“After a couple of years of hibernation, we can see Australians are taking advantage of hospitality venues flocking back to restaurants, enjoying home entertainment and domestic travel after the impact of lockdowns last year.

“The ARA expects this to be the biggest Christmas on record for Australia, with Aussies predicted to spend $66 billion in the Christmas trading period – up 6.4% on last year’s spending according to our ARA holiday sales predictions with Roy Morgan.

“Moving into next year, we do expect things to slow down – with a lag effect likely to the impact of inflation on retail spending.

“We acknowledge that it remains a challenging environment for businesses particularly small businesses on tighter margins, as they continue to battle rising operating costs associated with fuel, energy, labour, supply chains and rent.”

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