As feared, the peak Christmas shopping season of 2019 is turning out to have been much weaker versus the past few years. ANZ Bank card payments data signal sales for the period are down just over -5%. Christmas shopping accounted for a smaller share of December non-food retail expenditure, particularly in NSW, Queensland and Western Australia.
The analysts suspect strong sales in November’s Black Friday promotion were likely behind the comparable decline in December figures. Footwear and accessories were particularly weak, yet one of the strongest categories in November. Department store and clothing sales, which also experienced strong growth in November, eased significantly in December.
That said, the analysts acknowledge bushfires in December and smoke haze may have contributed, particularly for categories where purchases could be delayed. Compared with 2018, 2019 was weaker in every state and territory, with the ACT being the exception.
Mining states i.e. South Australia, Queensland, Western Australia and Northern Territory, were particularly soft. While the “Christmas” effect on retailing has been easing for several years, the ANZ data point to the soft patch in 2019 being particularly stark.
For example, in NSW non-food retail accounted for 37.7% of sales during the Christmas shopping season in 2019, falling from 39.4% of sales during the 2018 season. All categories in non-food sales, with the exception of electrical, were weaker.
ANZ Bank analysts also suspect the bushfires will materially affect early January household expenditure, with a dip in the ANZ/Roy Morgan Australian consumer confidence figures for the first weekend of the month signalling a notable impact.