Australia: Black Friday rejuvenates retail – ANZ

ANZ analysts note that Australia’s retail sales spiked up 0.9% MoM in November after eight consecutive months of weak retail growth.

Key Quotes

“Annual growth in retail sales lifted to 3.2% y/y in November. This is the strongest y/y result by month since March, and is above the average yearly growth result for the last three years. However, this is unlikely to be sustained, as some of the strength in November is likely to result in symmetrical weakness in December, as people pulled forward their discretionary spending for Black Friday.”

“Black Friday pushed up non-food sales, which grew 1.2% m/m, compared to 0.6% m/m for food sales. This nominal difference is subdued compared with what likely happened to volumes, as food prices have been rising faster than non-food prices in the last year. Black Friday’s heavy discounting likely pushed down average prices for non-food sales in November.”

“Annual growth results show the persistence of subdued household spending on non-essential categories, as food rose 3.7% y/y while non-food only rose 2.7%. Fashion (4.9% y/y), department stores (4.4% y/y), pharmaceuticals, cosmetics and toiletries (4.3% y/y) were the strongest non-food categories, while household-related categories and recreation were weakest.”

“Monthly growth was weakest in the South East in both October and November. NSW grew only 2.1% y/y, while VIC and SA grew 2.9% and 3.0% y/y respectively. Qld (5.4% y/y) and Tas (5.3% y/y) led annual growth.”