November retail sales fall short of expectations despite Black Friday frenzy

Retail sales in November have fallen short of economists’ expectations despite bargain hunters taking advantage of the extended Black Friday frenzy.

Cash-strapped consumers were out in droves during November encouraged by steep discounts from retailers, pushing sales up 0.8 per cent month-on-month, according to the Australian Bureau of Statistics on Thursday.

The annual rate of growth has now risen from about one per cent early in 2024 to three per cent in November.

While the monthly growth fell short of the one per cent rise economists had estimated — given widespread promotions were expected to give a bigger boost to spending — it was still the strongest monthly rise since January 2024.

AMP economist My Bui noted the November result came on the back of a decent October figure (up 0.5 per cent) as sales events started earlier in 2024.

“Many consumers may have front-loaded their purchases, unlike in 2023 when there was a pullback in October ahead of Black Friday sales,” she said.

Ms Bui reckons the latest retail data will be neutral in terms of the implications for the Reserve Bank.

“Retail sales disappointed and is evidence of a very gradual recovery in consumption. However, retail trend has clearly improved in recent months as consumer’s purchasing power also rose, thanks to lower inflation and a resilient labour market.

“The key upcoming data points remain (December quarter) inflation and next week’s employment data.”

Commonwealth Bank of Australia economist Harry Ottley said to this point, the rise in spending had not been as strong as the RBA initially expected.

“Indeed, in our view, the increase in household consumption to this point has been muted and does not pose a risk to our view of interest rate cuts in the near term,” he said.

All retail industries posted a rise in November, led by department stores (up 1.8 per cent), clothing, footwear and personal accessory retailing (up 1.6 per cent), household goods retailing (up 0.6 per cent), and other retailing (up 0.3 per cent).

ABS head of business statistics Robert Ewing said Black Friday sales events proved to be a big hit once again, with shoppers spending more than $36 billion across the country in November. In WA, shoppers spent just under $4.2b.

Local business owner Madi Sharpless, pictured above, offered 25 per cent off on selected items at her activewear brand HyperLuxe as part of Black Friday.

“Black Friday sale was extremely successful. We found there was a mix of both personal shopping as well as gift purchases, however it did skew to more personal purchasing this year,” she said.

“We did wonder how the current cost of living would affect the (Black Friday/Cyber Monday) sales, however it seems most people seemed to put these concerns aside as the volume of sales was much higher than previous years.

“With this being said, even though we had a higher volume of sales we noticed that sales were of a slightly lesser value.”

The Black Friday frenzy was felt across the country, with all States and Territories posting a lift in retail turnover.

The Northern Territory posted the biggest rise in November, up 1.6 per cent, followed by Queensland (up 1.2 per cent) and SA (up 1.1 per cent). Victoria rose 0.8 per cent and WA up 0.7 per cent.