Pre-Christmas 'freedom spending' retail sales outpace inflation to hit record $74.5 billion

Pre-Christmas 'freedom spending' retail sales outpace inflation to hit record $74.5 billion

Photo: Westfield Mt Gravatt, via Facebook.

Australian shoppers have put to bed any concerns that Black Friday-Cyber Monday (BFCM) would dampen December retail sales, defying expectations to spend a record $74.5 billion in the pre-Christmas period.

Figures released by the Australian Retailers Association’s (ARA) in partnership with Westpac DataX show this represents an 8.6 per cent uptick versus 2021.

The rise in retail spending is also higher than the most recent annual inflation rates reported by the Australian Bureau of Statistics (ABS), which stood at 6.9 per cent in October and 7.3 per cent in September.

More encouraging still is the fact that Boxing Day sales jumped 15.3 per cent - more than double the inflation rate - to reach $1.23 million, which has been described by ARA CEO Paul Zahra as an unparalleled result after several years of disruption.

"This is without a doubt, the biggest festive season spend on record – it is unprecedented,” Zahra said.

"It is remarkable that in this period of economic turbulence, traders have well and truly smashed it out of the ballpark as consumers revelled in ‘freedom’ spending," he said.

"An unrivalled $74.5 billion spend leading up to Christmas still didn’t diminish the spending appetite of Aussies leading into the year’s marquee retail savings event."

In terms of post-Christmas sales, the ARA and Roy Morgan are projecting a 7.9 per cent increase through to 15 January, although for non-food items the rate is higher at 11.1 per cent.

Zahra said the resilience and agility of the industry has been remarkable following three years that have been incredibly challenging for everybody.

"There are many elements driving this record spend. Australians are seeing shopping as an experience and a reward after such a challenging period," he said.

"We also know that price increases continue to elevate these numbers with many Australians also motivated to get in ahead of price rises and leverage savings during the sales events.

Shrugging off adversity, department stores drove the greatest growth on Boxing Day – up a whopping 23.6 per cent on last year – to reap $149.4 million in sales. Cafes, restaurants and takeaway food services were up 22.8 per cent, and clothing and apparel increased 19.8 per cent.

Household goods, the second-largest retail category for Boxing Day sales, was also up 14.3 per cent at $314.6 million.

"Boxing Day has once again cemented its status as the Grand Final of Australia’s favorite sport, shopping," Zahra said.

"The success shared by department stores in particular is truly outstanding, defying many predictions by commentators. It’s fantastic to also see the anticipated growth in clothing, footwear and personal accessory sales – another category that has experienced strong headwinds in recent years.

“These fabulous results really tie a bow on an extremely successful year for retail as we head into a period of greater uncertainty in 2023.”

Jade Clarke, head of Westpac DataX said spending remained strong despite the rising cost of living.

“We are delighted to support the Australian Retailers Association with a timely and deeper view into this critical revenue period for our retailers,” Clarke said.

“Westpac DataX has leveraged de-identified card-spend data to provide the ARA and its retailers access to important insights during this key trading time.

“The data shows that despite a year of increasing living costs, Australian retail sales have remained strong over the holiday period, improving on last year."

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