Retail Turnover Falls 0.5 Percent in December

There were falls within department stores (2.8 percent), clothing, footwear ad apparel (1.5 percent) and household goods retailing (0.3 percent).

There are suggestions that these falls are due to the bushfires that ravaged Australia across the Christmas and New Year period.

In January 2020, Bryan Raymond, Citi analyst, told the Sydney Morning Herald, there are positive and negative effects that will come out of the bushfire season. The haze, smoke and air quality that is currently plaguing the skies of Australia will have a ‘definite’ effect on retailers throughout the country.

“It’s hard to put a number or materiality on [the impact] at this point, it will vary a lot by retailer,” Raymond told SMH. “I think we’ll need to wait and see.”

“The December fall comes after a strong November, led by Black Friday sales,” said Ben James, Director of Quarterly Economy Wide Surveys. “There were also some effects from bushfires and associated smoke haze apparent in New South Wales data. Specifically, food retailing and cafes, restaurants and takeaway food services were negatively impacted.”

Dominique Lamb, the CEO of the National Retail Association stated that these results may come down to consumers doing their Christmas shopping in November, rather than in December.

“The shopping behaviour of Australian consumers is always changing, and this is best exemplified by the clear shift we’ve seen when it comes to making Christmas purchases,” Lamb said. “For November 2019 we saw turnover increase by an incredibly large 0.9 percent, however, the December figures shows a sizeable drop of 0.5 percent.”

“Black Friday and Cyber Monday have become increasingly popular, with shoppers making inroads into Christmas shopping by cashing in on these November bargain sales events. The important takeout for retailers is to be aware of this shift and understand it is likely to only become more pronounced in future years. Businesses should look to tailor their Christmas strategies to the last weekend of November which is bookended by Black Friday and Cyber Monday.”

The trend estimate for Australian retail turnover rose 0.3 percent in December 2019, following a 0.3 percent rise in November 2019. Compared to December 2018, the trend estimate rose 2.8 percent, the ABS report found.

State by state, New South Wales and South Australia saw the biggest impact throughout the December retail turnover, falling 1.2 percent and 1.3 percent, respectively.  Other states that experienced a fall included the Northern Territory (0.4 percent), and ACT (0.1 percent). Victoria and Western Australia had a reasonably unchanged retail turnover (0.0 percent). Tasmania was the only state that experienced a rise in turnover, lifting by 1.1 percent, seasonally adjusted.

Online Retail

Online retail continues to climb within the overall contribution of retail in Australia. In December 2019, online retail contributed to 6.6 percent of total retail turnover compared to 5,6 percent in December the previous year.

Overall, the report found that the December quarter 2019 saw a rise of 0.5 percent in seasonally adjusted volume terms. This follows a fall of 0.1 percent in the September quarter 2019.

“The results for the December quarter were quite encouraging, with a better than expected rise of 0.5 percent in retail sales,” Lamb said. “This further highlights the need to assess the Christmas shopping period as a whole and not simply December in isolation.”

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