December Strongest Quarter for Retail, Online Falling Behind

Power Retail By Power Retail | 07 Feb 2022

Retail sales volumes saw a surge in December as lockdowns were lifted, the ABS has reported. The December quarter has fallen 4.4 percent month-on-month but is 4.8 percent above December 2020 levels.

December retail sales lifted 8.2 percent compared to 2020 and are the strongest quarterly rise on record. This surpasses the previous record set in September 2020, and are now at the highest quarterly level, up 3.4 percent on the June quarter 2021 and 3.6 percent through the year.

Ben James, the Director of Quarterly Economy Wide Surveys explained that the warning of supply chain issues inspired shoppers to get a head start on their shopping for the holiday period. Timed with the opening of retail at the end of the year resulted in an increase in discretionary spending for December.

“Consumers enthusiastically returned to discretionary spending following the end of Delta related lockdowns in October, and the continued easing of restrictions over the quarter,” he said. “Well publicised concerns over product availability and delivery timeliness led to consumers bringing forward their end of year shopping, in conjunction with a re-opening spending splurge due to pent up consumer demand.”

The September quarter saw a sharp decline in discretionary spending but has since been offset by the massive uplift in sales for the December quarter. Specifically, there was a 43.1 percent increase in clothing, footwear and personal accessory retailing, a 25 percent increase in department store sales and a nine percent lift in household goods retailing.

“This post lockdown recovery aligns well with the previous nationwide Covid lockdown recovery in the September quarter 2020 where sales rose 6.3 percent, more than recovering the losses of the June 2020 quarter fall of 3.5 percent,” said James.

Online sales fell 4.9 percent in December to $3.6 billion. This is the third consecutive month of falling online sales. However, in seasonally adjusted terms, online retailing is up 20.5 percent through the year. Online sales represent 10.5 percent of total sales in December 2021, compared to 12.5 percent the month prior.

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