Retail Sales — November | By the numbers
- National turnover on a seasonally adjusted basis lifted by 0.9% in November to $A27.908bn; well above the 0.4% increase expected. Turnover growth in October was revised to show a 0.1% rise from the flat outcome initially reported by the ABS.
- Annual turnover growth (seasonally adjusted) lifted to an 8-month high, advancing from 2.3% (revised from 2.1%) to 3.2% in November.
- In trend terms, turnover lifted by 0.3% in the month, with annual growth firming from 2.7% to 2.9%.
Retail Sales — November | The details
Total retail spending surged by $251.7m in November (0.9%), which for context was more than the aggregate rise in turnover from the previous 4 months and was the single largest monthly increase since November 2017. Consistent with Black Friday promotions, this increase was driven by the discretionary areas; using sales ex-food as a proxy indicator for this, spending lifted by 1.2% in November or $191.7m in nominal terms making this its strongest monthly gain in 2 years, while the annual pace lifted to 3.0% to its fastest since October 2018. Increases in spending in the month were broad-based across clothing and footwear 3.1% (+$67m), household goods 1.2% (+$54.3m), department stores (+$54.1m) and cafes and restaurants 0.9% (+$37.1m), though 'other retailing' slipped by 0.5% (-$20.8m). Food sales increased by a moderate 0.5% ($60.0m).
While traditional bricks and mortar retailers also participate in Black Friday promotions, its genesis was in the online space and the ABS's latest estimates were a clear reflection of this. The Bureau reports that online spending surged by 14.5% in November — its strongest monthly increase since last year's Black Friday sales — to account for an estimated 7.1% of all retail spending in the month, lifting to a new record high level (see chart, below).
Total retail spending surged by $251.7m in November (0.9%), which for context was more than the aggregate rise in turnover from the previous 4 months and was the single largest monthly increase since November 2017. Consistent with Black Friday promotions, this increase was driven by the discretionary areas; using sales ex-food as a proxy indicator for this, spending lifted by 1.2% in November or $191.7m in nominal terms making this its strongest monthly gain in 2 years, while the annual pace lifted to 3.0% to its fastest since October 2018. Increases in spending in the month were broad-based across clothing and footwear 3.1% (+$67m), household goods 1.2% (+$54.3m), department stores (+$54.1m) and cafes and restaurants 0.9% (+$37.1m), though 'other retailing' slipped by 0.5% (-$20.8m). Food sales increased by a moderate 0.5% ($60.0m).
Switching to the state detail, turnover lifted across the nation in the month. In percentage terms, the gains were led by South Australia 1.4% (3.0%yr), followed by Queensland 1.2% (5.4%yr), Victoria 1.1% (2.9%yr), New South Wales 0.7% (2.1%yr), Western Australia 0.5% (3.1%yr) and Tasmania 0.4% (5.3%yr).
For the two largest states, New South Wales and Victoria, accounting for a little under 60% of national turnover, their annual rates of growth appear to be moving off recent lows and is probably helped by the turnaround occurring in their respective established housing markets.
Across the other states, annual growth rates lifted in Queensland, South Australia and Tasmania but held steady in Western Australia. In general, these states were less impacted by the national decline in property prices between mid-2017 and mid-2019, though Western Australia is the notable exception here.
Retail Sales — November | Insights
The month of November provided a much-needed boost for the nation's retailers that have been mired in very weak trading conditions over recent times, with consumer confidence weakening in response to concerns over the economic outlook and slow wages growth weighing on discretionary consumption. Widespread promotions around Black Friday discounts, which were not confined to online platforms, appear to have had the desired effect in encouraging consumers to part with some of their recent windfall that flowed in the September quarter from RBA rate cuts and the Federal government's tax relief measures that were target at low and middle incomes. Key now is whether the strength in spending continued into December in the lead up to Christmas, or if Black Friday promotions brought forward spending leading to a subsequent drop off in the final month of 2019. The most obvious example of this was back in 2017 when turnover jumped by 1.1% in November only to then fade away in December (-0.1%), though the similar impacts are harder to find in recent years. A further complication is that the nation's devastating bushfire crisis worsened over the Christmas and new year holiday period and this may have impacted spending in December.
The month of November provided a much-needed boost for the nation's retailers that have been mired in very weak trading conditions over recent times, with consumer confidence weakening in response to concerns over the economic outlook and slow wages growth weighing on discretionary consumption. Widespread promotions around Black Friday discounts, which were not confined to online platforms, appear to have had the desired effect in encouraging consumers to part with some of their recent windfall that flowed in the September quarter from RBA rate cuts and the Federal government's tax relief measures that were target at low and middle incomes. Key now is whether the strength in spending continued into December in the lead up to Christmas, or if Black Friday promotions brought forward spending leading to a subsequent drop off in the final month of 2019. The most obvious example of this was back in 2017 when turnover jumped by 1.1% in November only to then fade away in December (-0.1%), though the similar impacts are harder to find in recent years. A further complication is that the nation's devastating bushfire crisis worsened over the Christmas and new year holiday period and this may have impacted spending in December.
