Retail spending increases in December despite inflation


Retail spending increased 7.5 per cent year on year in December boosted by record Christmas and Boxing Day trading, according to data from the Australian Bureau of Statistics (ABS).

However, on a month-on-month basis, turnover fell 3.9 per cent as the cost of living pressures hit household budgets.

Cafes, restaurants, and takeaway services were up 25.4 per cent while department store sales increased 11.1 per cent. Clothing, footwear and accessories recorded a 7.4 per cent increase while food and ‘other retailing’ grew 6.8 per cent and 3.5 per cent respectively.

Household goods were the only category that recorded a fall, down 1.2 per cent.

Australian Retailers Association (ARA) CEO Paul Zahra said the figures are “impressive for retail” though the margin between inflation and sales growth is narrowing.

“Today’s data marks 16 consecutive months of year-on-year sales growth, which is an enormous achievement for retailers considering the disruption and challenges of the past few years.”

Despite economic headwinds, Zahra noted inflation appears to be driving a “significant” portion of sales growth.

“When you combine the strength of the record November retail sales, predominately driven by the success of Black Friday/Cyber Monday with December retail sales, this would account for a record holiday trade of $70.3 billion.”

By state, SA led with a 10.9 per cent increase followed by NSW at 9 per cent and Victoria at 6.5 per cent.

National Retail Association CEO Greg Griffith described the overall stats as a “positive indicator” for the sector.

“Retailers and shoppers have shown resilience amongst economic uncertainty. People have continued to spend and celebrate the end of the year and have taken advantage of the November sales events.

“However, we must also be aware that inflated costs hidden in the data have been a driver of increased spending, rather than volumes.”


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