Australian retail sales increased at their fastest pace in 11 months as spending in New South Wales surged following the end of the extended Delta lockdown in the state. The 4.9% rise in October returned national retail turnover to its pre-Delta level ahead of what is shaping up to be a strong end to the year for the sector.
Retail Sales — October | By the numbers
- National retail sales lifted by 4.9%m/m in October, in line with the preliminary estimate, to $31.1bn to be broadly back at pre-Delta levels. In September, sales advanced by 1.7%m/m.
- 12-month retail sales accelerated to 5.2% from 1.2% in September.
Retail Sales — October | The details
In September, retail sales had returned to growth (1.3%m/m) after declining by 6% over the period between May and August. The ending of lockdowns then drove an acceleration in the pace in October to 4.9%, its sharpest month-on-month rise in 11 months. Retail sales are now back to their level prior to the winter lockdowns and remain elevated on their pre-pandemic trend.
The wider reopening of the retail sector in NSW led to turnover in the state surging by 13.3% in the month. This accounted for 80% of the lift in national turnover. Sales in Victoria (3%) and the ACT (20.2%) rebounded as restrictions were eased, though the former is set to see a much larger rise come through next month as non-essential retailers in Melbourne were not permitted to reopen until November. Elsewhere, turnover was up slightly in Queensland (0.4%) and Western Australia (0.2%) but fell in South Australia (-1.2%) and Tasmania (-2.4%).
In NSW, spending ripped higher in the categories that were hit hard during the lockdown including; clothing and footwear 90.4%m/m, department stores 83.7%m/m, cafes and restaurants 29.4%m/m and household goods 17.1%m/m.
Similar trends can be expected in Victoria in November. One major difference, though, is household goods with the category not seeing anything like the falls up in NSW during its Delta lockdown. Perhaps, out of necessity, these retailers in Victoria were more accustomed to operating in lockdowns through online sales and click and collect services etc. Note that in the '2nd wave' 2020 lockdown in Victoria, household goods were off heavily but that was not the case this time around.
With the shops opening up again, online sales pulled back for the first time since May posting a 5.6%m/m decline in October but were still at tremendously elevated levels. Between May and September, online sales soared by 58.4%. There were declines in both the non-food (-5.6%) and food (-5.3%) segments in October.
Retail Sales — October | Insights
The uplift in retail sales growth from 1.3% in September to 4.9% in October highlights that household spending rebounded strongly once lockdowns had run their course, supported by the run-up in accumulated savings reported in yesterday's Q3 national accounts (see here). High-frequency card data indicates the momentum has continued through November, with Black Friday sales providing an additional tailwind in the lead-up to Christmas. Mobility data backs all this up, with national retail foot traffic now back around pre-pandemic levels.
