The ABS recorded growth of 3.25 per cent for the month of November – a welcome result, given the patchy and at times disappointing numbers throughout 2019.
In particular, the figures from October fell far short of expectations, leading to uncertainty heading into the critical pre-Christmas trading period.
The November figures indicate a pleasing rebound, vindicating those who predicted improvements driven by national sales – namely Click Frenzy, Black Friday, and Singles Day.
Initially e-commerce events, these events have now been adopted by bricks-and-mortar retailers and will likely become permanent important fixtures in the retail calendar.
Indeed, online retailing fell during November meaning consumers preferred the traditional in-store sale experience.
Spending for the month was strongest in South Australia, Queensland and Victoria. Queensland also topped the year-on-year figures, closely followed by Tasmania.
Previous attempts to stimulate consumer spending – namely interest rate cuts, tax rebates and the 3 per cent increase to the minimum wage – did not have a strong immediate effect, as had been hoped. Yet these factors may have contributed to the strong pre-Christmas lift.
The numbers across each category of the retail sector indicate consumers were willing to spend on all the traditional festive preparations, with food and liquor showing notable increases.
Australians were also generous in their gifting, with very strong annual growth in the clothing, footwear and personal accessories category – in which jewellery falls – and the best results for department stores since June 2016.
Spending in cafes, restaurants, and on takeaway food – generally considered a proxy for consumer confidence – performed strongly, recording 3.9 per cent growth over the year to November.
However, the ARA advises retailers to take a prudent approach in interpreting the results.
The extent of the retail recovery into 2020 may be limited by the devastating bushfire season, whose impact was yet to be felt in November.
Bushfire relief for retailers
Throughout December and January, the damage to businesses, supply chains and communities reached a devastating scale.
The next sets of RBA data will reflect the extent of the natural disaster and its impact on consumer sentiments.
At present, the ARA’s concern is the safety and wellbeing of those in bushfire-affected areas.
Homes, businesses and lives have been lost, and the ARA has put in place a number of initiatives to provide support and assistance to the communities affected.
One of the initiatives is a restocking program for retailers in bushfire-affected areas, conducted in conjunction with charity Good360.
Stock will be collected from unaffected areas and redistributed to retailers who have been devastated by the fires.
All retailers, regardless of size, location in Australia, or ARA membership, are invited to participate by contacting Good360 and arranging a collection. Cash donations will also be accepted.
The ARA is also offering its services – including advice on employment obligations, retail leasing and property law, and insurance – to all retailers affected by bushfires, regardless of whether they are ARA members.
A central reference page has been made live on the ARA website: www.australian-retailers-association.com/bushfire-relief-resources.
The ARA urges all Australians to support the families and communities who now face hardship as a result of the disaster.
Unity in the face of adversity is a defining feature of the Australian character, and it is time to stand shoulder to shoulder.