Australian retail sales increased a modest 0.8% year-on-year in December, with Christmas spending being subdued in 2023 mainly due to cost-of-living pressures.
According to figures released today by the Australian Bureau of Statistics (ABS), shoppers spent $35.1 billion across the country in December.
Most categories recorded growth, with the most significant year-on-year sales increases in department stores (up 3.7%).
Other retailing (up 1.7%), cafes, restaurants, and takeaway (up 1.6%) and food (up 1.4%) also saw modest growth.
Clothing, footwear and accessories (up 0.5%) recorded a slight increase while household goods saw sales decline (down 3.2%).
Most states and territories recorded growth year-on-year, led by Tasmania (up 3.1%), Western Australia (up 2.4%), Northern Territory (up 2.2%), ACT (up 2.1%), South Australia (up 1.5%), Queensland and Victoria (both 1.1%).
New South Wales recorded a spending decline of 0.6%.
Australian Retailers Association (ARA) CEO Paul Zahra said December’s results reflected projections that 2023’s Christmas spending would tread water as shoppers tighten their budgets.
“Throughout Christmas and the Boxing Day sales, we saw bargain-driven shoppers, who actively sought out the best deals and looked for value purchases.
“With household budgets under pressure, Christmas in 2023 was somewhat subdued compared to previous years – a result of cost-of-living challenges. We aren’t seeing the year-on-year growth that we did in previous years.
“The rising popularity of Black Friday also impacted December’s trading, with many Australians opting to purchase their Christmas gifts earlier during the major sales event in November.
“Department stores fared particularly well, capitalising on the Boxing Day sales and the final few weeks before Christmas with a range of promotional events.
“With high interest rates and increasing costs for families, we’re continuing to see a softening in discretionary spending.”
Mr Zahra said next week’s decision by the Reserve Bank of Australia will have significant bearing on the trading months ahead.
“We’ve seen reduced spending growth in December. Another interest rate increase would be crushing for retailers.”
ENDS
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