The success of Black Friday and Cyber Monday has helped fuel the biggest retail sales increase in two years, up 0.9 per cent in November to a record $27.9 billion.
The Australian Bureau of Statistics (ABS) figures were more than double the 0.4 per cent increased expected by economists. October’s flat sales result was also revised higher to show an increase of 0.1 per cent.
“We have seen strong growth in Black Friday sales, both in areas such as electrical goods and online sales, but also in areas such as clothing and furniture,” said Ben James, director of quarterly economy-wide surveys at the ABS.
“While seasonal adjustment removes regular seasonal patterns associated with Black Friday based on prior results, the strong seasonally adjusted rises in a number of sub-groups this month shows that the impact of this Black Friday exceeded that of previous years.”
According to data released by Shoppertrak, foot traffic during Black Friday sales jumped 32.5 per cent compared with a year earlier. Total foot traffic between Black Friday and the following Monday also increased by 14.9 per cent compared with 2018.
The monthly bounce saw annual sales growth accelerate to 3.3 per cent, the fastest increase in 13 months.
Sales excluding food rose by a stronger 1.2 per cent, leaving the increase on a year earlier at 3 per cent, also the fastest in 13 months. Many analysts believe non-food sales are more representative of discretionary spending patterns.
By category, department store sales surged by 3.4 per cent over the month. Turnover in clothing, footwear and personal accessory retailers also jumped by 3.1 per cent.
Sales of household goods rose by 1.2 per cent while spending at cafes, restaurants and takeaway food outlets increased by 0.9 per cent. Food sales, the largest category by dollar spend, grew by a smaller 0.5 per cent during the month.
Suggesting Cyber Monday promotions are also having an impact, the ABS reported that online sales accounted for 7.1 per cent of total retail turnover, a larger share than the 6.6 per cent level seen a year earlier.
Despite the strong November result, economists warned the increase may reflect that spending ahead of Christmas may have been brought forward by promotional sales, increasing the risk of a drop in spending in December.
“We remain concerned about the trend in consumer spending given weak October sales and the contraction in retail volumes in the September quarter despite $7 billion of personal income tax cuts,” said Kaixin Owyong, economist at the National Australia Bank.
“The promotions mean that much of the strength in today’s numbers likely reflects consumers bringing forward the timing of pre-Christmas purchases rather than spending more.”
Internal analysis of credit card transactions processed through the Commonwealth Bank’s platforms revealed that while spending at retailers either side of Black Friday, Cyber Monday sales was strong, total retail spending between November and early January fell 1.2 per cent compared to a year earlier.
“The Black Friday sales appear to have dragged spending forward from closer to Christmas rather than adding to overall spending,” Commonwealth Bank senior economist Belinda Allen said.
Adding to the risks of a weak December result, consumer sentiment, as measured by ANZ Bank, fell to four-year lows in early January, driven by deepening concerns about the outlook for the economy.
Separately, imports of consumer goods fell sharply in November, according to data released by the ABS this week, hinting that retailers aren’t expecting a sustained rebound in sales in early 2020.
Source: Thanks smh.com