Black Friday sales in Australia slightly underwhelmed expectations with turnover in November rising by 0.8% against a forecast 1% gain. Annual growth slowed from 3.5% to 3.0%, reflecting that the Black Friday sales of 2024 were more subdued than in 2023 where November sales advanced by 1.3%. Nonetheless, the 0.8% increase was still the strongest gain for retail sales since the start of 2024, while sales had come in above consensus in two of the past three reports into today's figures. Overall, support from the Stage 3 tax cuts and other fiscal measures appear to be playing a role in bolstering household spending.
Headline retail sales lifted by 0.8% in the month of November following a 0.5% increase in October (revised down from 0.6%), with Black Friday discounting and promotions boosting sales in both months. The Black Friday effect saw discretionary sales (headline sales ex-basic food) rising by 1% in November - their strongest gain since January 2024 - on the back of a 0.7% lift in October. The extended Black Friday sales period together with fiscal support measures including the Stage 3 tax cuts and electricity rebates have driven a pick-up in the momentum of retail sales growth. For the 3 months to November, headline sales averaged 0.6% and discretionary sales averaged 0.8% - both at highs since late 2023.
In the month of November, turnover increased across all major categories in the sector. The chart below shows that of the 0.8% increase in headline sales, discretionary sales contributed 0.6ppt. Households took advantage of price discounting leading to broad-based gains: department stores 1.8%, clothing and footwear 1.6%, household goods 0.6% and other retailing 0.3% (including cosmetics). Meanwhile, the ABS picked up spillover effects to spending at cafes and restaurants (1.9%), likely boosted by increased foot traffic through shopping centres, and in basic food sales (0.5%).
A key component of Black Friday sales occurs through online channels. Online sales increased at a solid pace over October (1.1%) and November (1.2%), equating to a rise in turnover of a little over $90m across the Black Friday period. However, that compares to a much larger boost in 2023 where online sales lifted by more than $125m over October (0.8%) and November (2.6%).
Across the states, the notable aspect was the subdued pace of sales growth in New South Wales over the Black Friday period. That state accounts for a little over 30% of retail turnover nationally, the largest of all states. Annual turnover growth in New South Wales was running at a 2% pace in November, underperforming all other states by a clear margin: Victoria 3.5%, Queensland 4.0%, South Australia 2.7%, Western Australia 3.5% and Tasmania 2.8%.
