Analysts at Westpac, notes that Australian retail sales expanded by 0.4% in November to be 2.8% above the level of a year ago while the annual figure is distorted lower by unfavourable base effects (sales jumped 1.2% last November followed by a sharp 0.5% decline in December).
“In trend terms, spending increased by 0.2% to be 3.6% higher than this time last year.”
“For retailers, Black Friday is the highlight of the November calendar – a largely on-line event which has increased in popularity over the past couple of years – and acts to bring forward spending from December.”
“More generally, retail spending has been choppy around a subdued trend. Weak wages growth, the housing downturn and drought conditions in NSW and surrounds are key headwinds.”
“For Q4, retail is tracking a little better – to date – but the key December sales remain critically important. If, for argument sake, sales post a gain of 0.2% in the month of December, the value of spending in Q4 will be up by 0.9% – a mild improvement on the +0.6% for Q3.”
“At the state level, spending in NSW rebounded in the month, up 0.8% but that comes after two sharp falls (-0.7% and -0.6%) and the trend monthly pace remains down, -0.1%.”