Australia retail sales shrink in Oct as spenders hold out for Black Friday
2023.11.27 20:08
© Reuters.
Investing.com– Australian retail spending unexpectedly shrank in October, as sticky inflation and pressure from high interest rates weighed, while consumers also held off big purchases in anticipation of the Black Friday shopping event in November.
fell 0.2% in October from the prior month, data from the Australian Bureau of Statistics (ABS) showed on Tuesday. The reading was weaker than expectations for growth of 0.2%, and also marked a reversal after a 0.9% jump in September.
Retail turnover fell in all sectors except food, although the pace of growth in food retailing also slowed as higher inflation saw consumers spending less on restaurants and cafes.
But overall retail spending still remained close to record highs at A$35.76 billion. Australian retail sales had surged to a record high of A$35.89 billion in Nov. 2022, thanks to the Black Friday event, which has gained increasing popularity in recent years. The event, which occurs on the first Friday after the U.S. thanksgiving holiday, is marked by steep discounts on retail goods.
The ABS said that anticipation of the event in November may have also kept consumers from spending big during October.
“It looks like consumers hit the pause button on some discretionary spending in October, likely waiting to take advantage of discounts during Black Friday sales events in November. This is a pattern we have seen develop in recent years as Black Friday sales grow in popularity,” Ben Dorber, ABS head of retail statistics said in a note.
Australian retail spending has remained largely resilient this year, thanks in part to a strong labor market. It has in turn also been a key driver of inflation, with October’s reading suggesting that inflation may still remain sticky in the coming months. A monthly reading on Australian is due on Wednesday.
Sticky inflation is also expected to elicit more interest rate hikes from the Reserve Bank of Australia, with Governor Michele Bullock recently warning of such a scenario. The bank had hiked rates by 25 basis points to 4.35% earlier this month.
