Black Friday sales drove Australian retail sales to a 2% lift in November (vs 1.2% consensus), the fastest increase in 2 years. Sales slid in the prior month (-0.4%) as households delayed purchases ahead of Black Friday and in the run-up to Christmas. The upside lift in November sales reflects households taking advantage of price discounting amid cost-of-living pressures and an extended sales period compared to recent years.
The 2% rise in headline sales was driven by a 3.1% surge across the non-food or discretionary categories. This was the sharpest rise in discretionary sales in 21 months, highlighting the popularity of the Back Friday period in 2023. Food sales saw a 0.4%m/m rise, in line with the October outcome.
In 2023, Black Friday had the largest effect on household goods (7.5%), with significant increases coming through in electrical appliances (14.4%) and furniture (9.7%). This differs from prior years where clothing and footwear has typically seen the sharpest increase of all the categories during the Black Friday sales. Clothing and footwear still posted a solid 2.7%m/m rise, though that was broadly in line with the outcome from 12 months ago (2.2%). Department stores (4.3%) posted their strongest rise since the opening month of the year. Additional foot traffic through shopping malls may have contributed to an associated rise in turnover at cafes and restaurants (0.4%), with the category rebounding from declines over the prior two months.
The online segment saw a similar spike for Black Friday in 2023 when compared with 2022. While turnover for November increased at a much slower pace in 2023 (3%) than in 2022 (6.6%), the segment accounted for an almost identical share of total spending at 12.7% when compared with the previous year (12.6%). While online platforms are popular for Black Friday sales, many of the discounts are available in-store and the profile of sales growth in November being led by household goods reflects this.
In looking ahead, the pattern in recent years has been for retail sales to fall back in the December month following the surge for Black Friday in November. This effect was quite pronounced in 2022 as sales swung from a 1% rise to a 3.4% fall. The pullback was less severe in 2021 (6% to -3.3%) and 2020 (5.7% to -2.9%); however, lockdown and reopening effects were also at play during those pandemic-affected years.
