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Australian Bureau of Statistics (ABS) Retail Dec 2023


ABS retail sales to Dec 2023

Well, everyone seems to be stressed on the latest Australian Bureau of Statistics (ABS) figures, which show retail sales fell 2.7% in December 2023. But what seems forgotten is that we had a strong November, plus December had a 0.8% year-on-year growth that exceeded many analysts' expectations given broader economic pressures.

Key Takeaways:

  • Retail turnover rose 0.8% year-on-year in December to $35.1 billion
  • Discretionary categories slowed but the overall result beats the forecast
  • Food services still face margin pressures from surging input costs

As Ben Dorber of the ABS noted, November's surge was partly consumers pulling forward holiday spending for Black Friday. A December decline was anticipated but it did not happen as it is up on last year figures.

Moderation in Discretionary Spending

The data shows discretionary categories slowed in December after November's peak:

  • Household goods like furniture and appliances fell 8.5%
  • Department stores declined 8.1% despite a solid 3.7% annual growth
  • Clothing and footwear dropped 5.7%

This aligns with most expectations of consumers tightening non-essential spending heading into 2024. Retails need to concentrate on essentials and items such as children educational items which people are not cutting back on.

Ongoing Pressures in Food Services

Concerns remain around food services, with turnover up just 1.6% year-on-year.

This is clearly not enough, as we have seen in all retail rising input costs like labour, rent, and utilities. So, this margin squeeze is worrying.

Key Takeaway: Cautious Optimism

Despite headwinds, December's better-than-expected retail sales provide some reasons for optimism. Retailers should promote necessities and focus on providing value amidst household budget tightening.

The full ABS data shows the actual figures here with its insight into consumer behaviours, category trends and state, which stunned me as Tasmania is just so solid. So click here for more details on how it affects you.


Update: I got a query about this, of which I still stick to my conclusion; if you look at the quarter, it is if you add it up 0.5%, which is certainly not brilliant, but it's still positive. 


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