Investing.com-- Australian retail sales grew more than expected in November, as consumers raced to take advantage of increased discounts and promotional offers during the Black Friday shopping event.
Retail sales grew 2% month-on-month in November, data from the Australian Bureau of Statistics (ABS) showed on Tuesday. The reading was higher than expectations for a rise of 1.2%, and improved substantially from the 0.2% drop seen in the prior month.
Retail sales had fallen in October as consumers also held back on spending in anticipation of the Black Friday event, with high inflation and interest rates in the country making retailers more conscious of their spending.
The Black Friday event has gained increasing popularity in Australia in recent years. It occurs on the first Friday after the U.S. thanksgiving holiday, and is marked by steep discounts and increased promotional offers on retail goods.
The following Monday is also marked by high discounts on electronic items, and is referred to as “Cyber Monday.”
“The strong rise suggests that consumers held back on discretionary spending in October to take advantage of discounts in November. Shoppers may have also brought forward some Christmas spending that would usually happen in December,” Robert Ewing, ABS head of business statistics said in a note.
But the strong reading for November was also an outlier for an otherwise weak trend for retail sales through most of 2023. Growth in consumer spending in Australia has slowed sharply over the past two years, as high inflation and rising interest rates ate into savings.
While a strong labor market and consistent wage growth kept retail sales trending positive, their pace of growth largely stagnated through 2023. Barring some Christmas shopping, December is also expected to show little improvement.
But the stronger retail spending in November is likely to factor into a higher inflation reading for the month. Consumer price index inflation data for November is due on Wednesday.
While inflation is expected to have cooled further in November, it is still set to remain well above the Reserve Bank of Australia’s 2-3% annual target range.
The RBA had hiked interest rates in November, and warned that more rate hikes could be possible in the face of sticky inflation and a strong labor market.
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