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Department Store Sales Down 14.3%, Oz Retail Finally Crashes

Australian retail sales have finally crashed, following 11 months of continuous rises driven by inflation and pandemic savings buffers.

December retail sales fell 3.9 per cent, a far worse fate than the expected 0.3 per cent fall predicted by analysts.

Despite this dive, sales still managed to rise 7.5 per cent during 2022 – albeit a rise that sits below current inflation levels of 7.8 per cent.

Department stores saw the biggest hit, down 14.3 per cent.

This was closely followed by clothing, footwear and personal accessory retailing (down 13.1 per cent), household goods (down 7.8 per cent) and other (down -4.6 per cent).

Food retailing saw the only rise, up 0.3 per cent — again, much lower than the food price inflation that drove this artificial rise.

The large fall for department stores is at odds with David Jones and Myer’s own reporting. Myer claimed its department stores sales for the six-week period to December 24 were up 8.7 per cent on the same period in 2021.

David Jones reported its own six-week sales to December 24 were up 2.3 per cent.

December’s dive was the first since November 2021, which the ABS puts down to the creep of cost-of-living pressures.

“Retail businesses reported that many consumers had responded to these pressures by doing more Christmas shopping in November to take advantage of heavy promotional activity and discounting as part of the Black Friday sales event,” the ABS says.

“While there was a strong rise in original terms for December, as is expected in the lead up to Christmas, this year’s rise in original terms was smaller than those typically seen in past December months.

“This has led to the large seasonally adjusted fall.”

Australian Retail Association’s CEO Paul Zahra prefers to put a positive spin on the figures, while noting the impact of inflation in the run of sales growth.

“Today’s data marks 16 consecutive months of year-on-year sales growth, which is an enormous achievement for retailers considering the disruption and challenges of the past few years,” Zahra said.

“Australia saw a bumper Boxing Day spending spree, which bolstered sales to notch an impressive year-on-year increase.

“December’s results remain strong in the face of adversity, with economic headwinds proving to be a hurdle. With inflation hitting a post-1990 peak, it appears to be driving a significant proportion of sales growth.”

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