Retail Sales: November 2022 - The Australian consumer hasn’t got the memo

About the author:

Author name:

By Alexander Mees

Job title:

Co-Head of Research and Senior Analyst

Date posted:

11 January 2023, 12:00 PM

Sectors Covered:

Gaming and Retail

• Retail sales rose +1.4% m/m in November 2022, above market expectations of a +0.6% increase (source: Reuters). This is especially impressive as the ABS has revised its October data up by 0.6 ppts. On a y/y basis, the growth was +7.7%. This is still strong, but was the slowest pace of y/y increase since January 2022. This suggests either retail transactions or inflation (or maybe both) are starting to ease.
• November is an important month for the retail sector as it contains Black Friday, which heralds the start of the Christmas shopping season. The best performing category on a m/m basis was Clothing & Footwear.
• Preliminary data for December 2022 will be released on 31 January 2023. Early data from the Australian Retail Association in partnership with Westpac DataX, point to the likelihood of a strong December too.

Clothing & Footwear was strongest on a m/m basis

The best performing category m/m was Clothing & Footwear (+6.4%, within which Footwear increased +9.8%), followed closely by Department Stores (+5.4%).

All major categories grew sales m/m, though Food & Drink and Eating Out were only just in positive territory (both +0.1%).

Eating Out was strongest y/y as society gets backs to normal

On a y/y basis, Eating Out was the best category (+24.8%) reflecting a normalisation after COVID disruptions in the pcp. Within this category, Cafes & Restaurants was the stronger subcategory (+31.6%), with Takeaway Food up +14.8%.

Clothing & Footwear and Department Stores were both up c.7% y/y. Only one category, Household Goods, was down on a y/y basis (-2.1%), within which the Electricals & Electronics subcategory was weakest (-7.1%).

Jump in online sales

After a period of post-COVID normalisation, online sales jumped 25.6% m/m in November to make up 12.6% of total retail sales, up from 10.7% in October.

Given the occurrence of Black Friday and Cyber Monday in November, this isn’t a great surprise, but the y/y growth was good too (+7.9%) and the penetration rate slightly higher than November 2021 (12.5%).

We expect the penetration rate to fall back in December as consumers tend to shop more in-store in that month. Over the past 5 years, online penetration has averaged 1.2 ppts higher in November compared to December.

Figure 1: Retail sales in Australia (A$m, seasonally adjusted)

Source: ABS

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