Australian retail spending accelerated by 7.1% for the month in November on the reopening of the Victorian state economy from its lockdown and the effects of the Black Friday sales period. Policy stimulus measures and shifts in consumption patterns have provided very strong momentum to retail sales over recent months.
Retail Sales — November | By the numbers
- Retail turnover (nominal) advanced by 7.1% in November to $31.654bn to come in ahead of the preliminary reading (7.0%) following a 1.4% rise in the month prior.
- Turnover growth in annual terms jumped to a 19-year high of 13.3% from 7.1%.
Retail Sales — November | The details
The wider reopening of the economy in the state of Victoria led to turnover growth there surging by 22.4% in November while spending across the rest of the nation lifted by 2.6% helped by Black Friday sales; these effects driving national retail sales to an elevated 14% above their pre-pandemic level.
The compositional mix of spending in November reflected reopening dynamics, while the weighting towards discretionary spending (sales ex-food up 12.7%m/m to 7.1%m/m for total retail) was consistent with Black Friday sales. The gains were strongest in clothing and footwear (26.7%m/m), department stores (21.1%m/m) and household goods (12.7%m/m). Spending at cafes and restaurants lifted 6.7% in November boosted by a 47.2% surge coming in Victoria as restrictions on dining were lifted. Declines in the 'stay at home' areas of spending in basic food (-0.3%m/m), liquor sales (-4.1%m/m) and online sales (-0.9%m/m) highlight the shift that occurred as Victoria reopened; basic food sales in the state pulling back by 5.6% and liquor falling by 3.1%.
Compared to their pre-pandemic levels, spending at cafes and restaurants is the only major category that is still lower than where it was in February; while all others are comfortably elevated above that baseline.
As highlighted earlier, turnover in Victoria led the way in November with a 22.4% surge, while sales were also generally robust across the other states; New South Wales 2.3%, Queensland 4.5%, Tasmania 3.4%, and Western Australia 1.2%. The exception to this was in South Australia (-0.2%) after the state was placed into a short lockdown during the month. The chart, below, shows that retail sales in each state sit at very elevated levels compared to the pre-pandemic baseline in February. In November alone, turnover in Victoria jumped to 13.8% above its pre-pandemic level from -7.1% in October as the reopening led to increased opportunities to spend combined with the effects of earlier stimulus measures.
Retail Sales — November | Insights
Victoria's reopening and the Black Friday sales period injected more momentum in national retail spending in November to a record high ($31.65bn) that is some 14% above its pre-pandemic level. The strength in retail sales reflects the effects of the range of policy stimulus measures implemented to support the economy as well as shifts in consumption patterns that the pandemic has prompted with spending on services (such as travel and other areas affected by ongoing restrictions) being directed to more goods-related consumption.
