Australians have continued to power through the pre-Christmas trading period with sales increasing 12.9% in October compared to the same time last year according to the latest Mastercard SpendingPulse™, which measures in-store and online retail sales across all forms of payment.
It also measured that sales were up 28.2% on pre-pandemic levels.
All retail categories are reportedly seeing notable year-on-year sales growth as Australia cycles the lockdowns of 2021.
Apparel and jewellery saw an increase of 40% and 41.1% respectively, above electronics (up 30.5%) and home furnishings (up 21.5%), with lodging recording the largest increase up 60.3% compared to 12 months prior.
Australian Retailers Association (ARA) CEO Paul Zahra said the Mastercard SpendingPulse™ numbers reinforce ARA’s forecasts about the strength of the retail economy heading into the Christmas trading period.
In the Black Friday and Cyber Monday sales alone, the ARA - in collaboration with Roy Morgan forecasts - predicts sales to reach a record $6.2 billion.
“Retail performance this year continues to be outstanding, despite a dramatic drop in consumer confidence due to inflation,” Zahra said. “The Delta lockdowns of 2021 are a driving factor behind the substantial growth we’ve seen in the year-on-year comparisons along with price increases.
“It’s encouraging to see categories such as lodging and apparel bounce back from the dramatic setbacks of the pandemic with the continued strength in jewellery sales demonstrating the resilience of luxury retail.”
Zahra said the ARA holiday sales predictions with Roy Morgan show Australians will spend nearly $64 billion in the lead up to Christmas, up 3% on last year.
“We recognise the impact of rising interest rates and inflation on households and we anticipate a lag effect on consumer spending, with a softening of sales likely to occur in 2023,” Zahra continued.
“Unfortunately, the biggest trading challenges for retail right now are crippling staff shortages and managing ongoing supply chain disruptions. We also acknowledge the challenge many small businesses continue to have as they contend with rising operating costs associated with fuel, energy, supply chains and rent.
“The Christmas trading period is particularly important for these businesses as they replenish their cash reserves, in preparation for what is likely to be a challenging year ahead.”