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Department store and fashion sales have tumbled by -14.3 per cent and -13.1 per cent respectively in December 2022, according to the Australian Bureau of Statistics, following a spike in both industries the month prior.

In November 2022, clothing, footwear and personal accessory retailing rose 6.4 per cent, with department stores then up 5.4 per cent.

Overall, Australian retail turnover fell 3.9 per cent in December 2022, following a 1.7 per cent rise in the prior month.

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ABS head of retail statistics Ben Dorber said this is the only monthly fall in retail turnover for 2022, following eleven consecutive monthly rises.

“Retail turnover remains elevated at its sixth-highest level in the series and was up 7.5 per cent through the year,” Dorber said. “The large fall in December suggests that retail spending is slowing due to high cost-of-living pressures.

“Retail businesses reported that many consumers had responded to these pressures by doing more Christmas shopping in November to take advantage of heavy promotional activity and discounting as part of the Black Friday sales event.”

Dorber added that seasonal spending patterns continue to change and evolve around Black Friday and the holiday period.

“While there was a strong rise in original terms for December, as is expected in the lead up to Christmas, this year’s rise in original terms was smaller than those typically seen in past December months. This has led to the large seasonally adjusted fall.”

Turnover fell in industries previously boosted by November Black Friday sales. Following previously mentioned department stores and clothing, footwear and accessories, household goods retailing dropped by -7.8 per cent and other retailing by -4.6 per cent.

Food retailing was the only industry to record a rise in December (+0.3 per cent), while cafes, restaurants and takeaway food services remain relatively unchanged from November.

Retail turnover fell across all states and territories, with the majority down by more than 3.0 per cent.

“The latest Consumer Price Index showed that prices continued to rise strongly in the December quarter,” Dorber said. “To see the effect of consumer prices on recent turnover growth, it will be important to look at quarterly retail sales volumes, which we will release next week.”

National Retail Association CEO Greg Griffith commented, saying that overall the statistics are a positive indicator for the sector.

“Retailers and shoppers have shown resilience amongst economic uncertainty,” Griffith said. “People have continued to spend and celebrate the end of year and have approached the silly season by taking advantage of the November sales events.

“Even though December’s nosedive breaks an 11-month streak of recorded growth for retail, year-on-year growth has risen by 7.5 per cent.”

Griffith suggested Australians are joining the growing trend of pre-Christmas sales events and starting their festive shopping earlier.

“A lot of money that was spent on Christmas celebrations was spent in November, which recorded a 1.7 per cent increase for the month.

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

“That did not deter shoppers, though, as the first holiday season free from lockdowns and restrictions had everyone itching to get out and spend.”

Griffith said the retail sector is bunkering down for a slowing of spending to continue for the first half of 2023.

“With the cost of living crisis ongoing, and the Reserve Bank potentially lifting interest rates once again when they meet next week, consumers will reel in their discretionary spending until inflation declines later this year.”

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