Australian retail sales increased by 5% in November 2022 compared to the same time last year, which is a 7.9% drop from October's year-on-year result. This is according to Mastercard SpendingPulse™, which measures in-store and online retail sales across all forms of payment.
Most retail categories saw growth in November as Australia cycles the impact of the 2021 Omicron wave, with apparel coming in fourth at 8.6%. Lodging recorded the biggest increase in trade in November, up 21% compared to 12 months prior, followed by grocery (up 10.3%) and restaurants (up 8.9%). Behind apparel, fuel and convenience was up 4.8% and Electronics was up 2.6%.
Home furnishings and jewellery were the only two to record falls, down 4.1% and 1.2% respectively. This is reportedly off an elevated level of sales in the previous year due to the pandemic.
Compared to October 2022, the growth in November has slowed. In October, apparel and jewellery then saw an increase of 40% and 41.1% respectively, above electronics (up 30.5%) and home furnishings (up 21.5%). Lodging recorded the largest increase up 60.3% compared to 12 months prior. Overall retail sales in October 2022 was at 12.9%.
Returning to November 2022, year-on-year retail sales growth is up 25.6% compared to November 2019 (pre-pandemic).
Australian Retailers Association CEO Paul Zahra said the November results confirm that Christmas continues to come earlier for retailers with consumers motivated to get in ahead of price increases and to avoid supply chain disruptions.
“Whilst we’ve seen the overall year-on-year sales growth slow, these remain really pleasing results in a challenging economic environment,” Zahra said. “The growth is driven by a host of factors including the incredible growth in Black Friday and Cyber Monday sales in Australia.”
Zahra noted that price increases are also a factor, prompting Australians to spend to get in ahead of inflation. He also indicated that the ease of restrictions towards post-pandemic is also driving sales, as Australians continue to get out and about.
“The ARA expects this to be the biggest Christmas on record for Australia, with Aussies predicted to spend $66 billion in the Christmas trading period – up 6.4% on last year’s spending according to our ARA holiday sales predictions with Roy Morgan.
“Moving into next year, we do expect things to slow down – with a lag effect likely to the impact of inflation on retail spending.
“We acknowledge that it remains a challenging environment for businesses particularly small businesses on tighter margins, as they continue to battle rising operating costs associated with fuel, energy, labour, supply chains and rent.”
Last week, the National Retail Association predicted the final 10 days before Christmas will bring $21.5 billion for retailers across Australia.
Interim CEO Lindsay Carroll said this is a 3.9% increase on the same period last year, and is expected across all sectors.
“Spending will largely be in-store as many of the online delivery cut-off dates have already passed,” Carroll said, “but this is great news for our bricks-and-mortar retailers, many of whom are still recovering from less foot traffic during the pandemic.”
Carroll noted that cost of living pressures have prompted consumers to approach their festive spending with caution.
“Due to rising inflation and interest rates, consumers kicked off their Christmas shopping earlier than previous years to spread the cost of their celebrations,” she said. “People have been shopping more often but with smaller purchases, so it’s no surprise retailers will be run off their feet in the final 10 days.”
The NRA forecast Australians will spend a total of $60.6 billion throughout the Christmas trade period, which encompasses half of November and all of December.