Australia's retail sales saw a notable increase in November, partially driven by the impact of Black Friday promotions. According to the Australia Bureau of Statistics, retail sales gained a seasonally adjusted 0.8% in November compared to October, building on a 0.5% increase in October and a 0.4% rise in September. The term 'Black Friday' has been adopted from U.S.
retailers, marking the last Friday of November and is often viewed as the beginning of year-end holiday shopping. 'Black Friday sales events proved once again to be a big hit, with widespread discounting and higher spending across all retail sectors,' said an ABS official. This year, the popularity of Black Friday promotions has expanded, influencing shopping patterns throughout the entire month of November rather than just the Black Friday weekend. Despite these positive indicators, some Australian analysts described the November retail sales results as somewhat underwhelming.
'The weaker-than-expected retail trade figures, combined with soft underlying inflation, reinforce our perspective for a potential rate cut by the Reserve Bank of Australia (RBA) in February,' commented Carol Kong, an economist and currency strategist at Commonwealth Bank of Australia. Diving into specific categories, department store sales rose by 1.8% month-over-month, while sectors such as clothing, footwear, and personal accessories experienced a rise of 1.6%.
Furthermore, household goods retailing appreciated by 0.6%, and cafe and restaurant sales increased by 1.5%, marking the fourth consecutive month of growth. The November retail sales figures were largely in line with general expectations, albeit on the lower side. As the RBA prepares for its next meeting scheduled for February 17-18, the retail sales data will play a significant role in shaping monetary policy decisions moving forward. In a broader context, the RBA had previously lowered its key policy rate to 0.10% in 2021 to mitigate the economic downturn caused by the COVID-19 pandemic.
However, in an effort to manage rising inflation, the central bank began to incrementally raise the policy rate beginning mid-2022, which led to a current key rate of 4.35% as of December 2023. Australia's inflation rate peaked at 8.4% year-over-year in December 2022 but has since moderated, registering at 2.3% year-on-year in November, sandwiched within the RBA's target inflation band of 2% to 3%..