Australian retail sales started 2021 with a 0.5% rise in the month of January, with turnover remaining significantly elevated above year-ago levels. The strength in retail spending has been broad based across the industry, with in-home sending the most elevated category prompted by the effects of the pandemic and social distancing restrictions.
Retail Sales — January | By the numbers
- Retail turnover (nominal) posted a 0.5% rise in January to $30.5bn, coming in slightly softer than the preliminary and median estimate of 0.6%, after falling by 4.1% in December.
- Annual turnover growth advanced by 1ppt rising to 10.6%.
Retail Sales — January | The details
Australian retail spending made a solid start to 2021 with a 0.5% rise, which lifted turnover 10.6% higher than a year earlier and some 10% above its level from immediately before the onset of the pandemic. A surge in spending occurred in November as retailers in Victoria reopened and demand for Black Friday sales was strong. The pull-forward in spending ahead of Christmas led to turnover retracing in December with a 4.1% decline. But the outcome in January sees strength in retail holding up at elevated levels.
The underlying detail showed turnover growth was driven by basic food with a 1.6%m/m rise as discretionary spending (sales ex-basic food) declined by 0.3%. January's breakdown potentially reflects pandemic-related concerns that were evident at the time, with a localised lockdown being enacted in Sydney's Northern Beaches and a 3-day hard shutdown declared in Brisbane. The rise in the food category included strong gains across supermarkets (1.3%) and liquor stores (2.3%), while the declines were steepest in clothing and footwear (-3.6%) and in cafes and restaurants and takeaway outlets (-0.8%).
Supportive of the stay-at-home tone in the composition of spending was the 1.6% rise in online sales in January, which was its first monthly increase since August, firming annual growth to 62.8% from 55.0%.
Turning to the states, turnover in Queensland contracted by 1.5% for the month, likely reflecting the impact of the shutdown in Brisbane and its after effects through tighter restrictions on the reopening. All other states posted gains for the month, with the strongest of those in Western Australia (2.1%). Growth was of a similar magnitude in Victoria (1.0%) and New South Wales (0.8%) despite the concerns around the virus in the latter. Overall, all states are seeing retail turnover at levels that are now much more elevated than before the pandemic.
Retail Sales — January | Insights
A positive start to 2021 for retail sales with some pandemic-related effects appearing to show up in this latest report for January. But, overall, the strength in retail spending held up at very elevated levels, with total turnover up 10.6% over the year and discretionary turnover 10.4% above its level from 12 months earlier.
