Black Friday & Cyber Monday Boost November Sales, Slow Christmas
National Australia Bank’s analysis of the nation’s spending over November and December has highlighted the booming popularity of Cyber Monday and Black Friday sales a month prior to Christmas, pulling forward sales and causing a slow spending in December.
It raises the issue of the Australian Bureau of Statistics (ABS) including sales from Black Friday into its seasonal factors when calculating retail trading.
The NAB Cashless Retail Sales Index showed an increase in year-on-year growth for November to 8.7 per cent, up from 8.5 per cent in October. But the year-on-year growth for December lessened at 8.4 per cent.
‘The strong November (and our expectation of a weak December figure) is likely a result of the relatively new and ever-expanding Black Friday sales bringing forward Christmas spending into November,’ NAB chief economist Alan Oster told The Australian.
‘This change in spending is yet to be fully incorporated in the ABS seasonal factors.
‘Household goods, department stores and clothing and footwear all saw strong November but are (based on our forecasts) likely to fall in December, consistent with Christmas spending brought forward.’
Jewellery retailer Michael Hill is one example of this change in spending behaviours – the November Black Friday and Cyber Monday sales for the jeweller pulled in stronger sales in November, with a slower December.
Michael Hill chief executive Daniel Bracken also told the publication that they anticipated the Christmas trading pattern to soften after strong November sales.
Additionally, Oster said ongoing vulnerabilities in the retail sector during high consumer debt levels and slow wage growth would unlikely see a sustained lift for the embattled sector – especially with the bushfires worsening consumer confidence.
He said that the catastrophic bushfires will likely further damage consumer spending in January and February, around the same time the Westpac-Melbourne Institute index of Consumer Sentiment confirmed the dive of consumer confidence this month.
But it’s not going to get better anytime soon – with more fundamental issues facing the industry, such as high rates of unemployment, slow wage growth and increased consumer wage debt to dampen consumer spirits.
The sluggish retail sector in recent years has seen closures from Big W, Harris Scarfe and EB Games.