Nov sales: +7.1%mth, 13.3%yr. Big lift on Vic reopening, Black Friday sales – but more virus-related disruptions loom in Dec.
The final estimate of November retail sales showed a 7.1% surge, in line with the preliminary estimate released three weeks ago. Sales are well above their pre-COVID levels and up an impressive 13.3%yr. The strength reflects reopening rebounds – centred on Victoria in the latest month – and an indirect boost as consumers redirect spending from constrained non-retail segments such as travel and tourism towards retail segments. The increasingly popular ‘Black Friday’ sales also look to have provided some boost this month.
The state detail showed a spectacular 22.5% rebound in Victoria as lockdown restrictions were lifted at the start of the month. Sales across the rest of Australia recorded a less spectacular but still strong 2.6% gain on a combined basis. The month saw strong rises in Qld (+4.5%) and Tas (+3.4%), a robust 2.3% gain in NSW but a milder 1.2% rise in WA where reopening rebounds have largely passed. SA was a notable soft spot, recording a 0.2% dip as the state’s brief lockdown impacted late in the month (albeit offset by stockpiling expenditure on basics). Sales in all states except SA are up well over 10%yr.
The storetype categories showed big spikes for clothing (+26.7%mth, 18%yr), department stores (+21.1%mth, 15.5%yr) and household goods (+12.7%mth, 16%yr). Other non food retail sales also posted a strong 7.9% rise to be up 8.8%yr. Food retail showed a clear reopening driven swing, cafes and restaurants up 6.7%mth (but still down 6%yr) and basic food retail down 0.3%mth (but still up 11.1%yr) – the shift particularly marked in Victoria.
While there are many virus-related cross currents operating across the different states, the detail does point to some additional lift coming from ‘Black Friday’ sales late in the month. Sales ex Vic included strong gains for electronics, clothes and department stores. That said, monthly online sales were marginally lower in seasonally adjusted terms, suggesting the boost was more muted than in previous years (noting that seasonal adjustment is less reliable for online sales).
Large non food retailers saw the strongest gain in the month, sales up 17.4%mth and continue to lead the expansion, sales up a whopping 22.2%yr. Small retailers posted a more muted 6.1%mth gain to be up 8%yr – many sectors such as cafes and restaurants seeing reopening gains but still constrained by ongoing social distancing restrictions.
Looking ahead, December and January are set to see more virus-related disruptions – a significant cluster leading to a lockdown in some of Sydney’s northern suburbs in late December, and then a quarantine-related case of a more infectious strain prompting a 3-dayl lockdown in Brisbane in January. Other restrictions have also been tightened, including on Inter-state travel. Measures to date look to have been relatively mild – a view broadly confirmed by measures of mobility available up to January 5. However, they have clearly put a major dampener on many Christmas and New Year activities, including the ‘Boxing day’ post Christmas sales. With some of November’s gain also likely to be a pull-forward in spending, December looks set to register a fall in monthly retail sales.
