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It wasn’t the merriest of Christmases for Australian retailers last year, as retail sales posted their first monthly contraction in five months in December.
Capping off a weak end to 2016 for the industry, retail sales fell 0.1 per cent month-on-month in December, from a downwardly revised 0.1 per cent (previously 0.2 per cent) growth reading in November. The median estimate in a Bloomberg survey was for a 0.3 per cent gain.
The Australian Bureau of Statistics noted the biggest declines for categories such as household goods retailing (-2.3 per cent) and other retailing (-0.2 per cent). These were offset by other categories related to food and personal items that do brisk trade in the lead-up to Christmas.
For the quarter, retail sales excluding inflation were up 0.9 per cent quarter-on-quarter at the end of December, an improvement from the revised zero (previously -0.1 per cent) for the September quarter, and in line with the median of economists’ estimates.
Still, the monthly decline for December saw the Australian dollar sink as much as 0.3 per cent in morning trade, before stabilising 0.2 per cent lower at $0.7667.
Ahead of today’s release, economists at Westpac expected December to be a disappointing month for retail trade, arguing:
Consumer sentiment fell away late in the year, swinging back from ‘cautious optimism’ to ‘cautious pessimism’. The retail components of private sector business surveys were also softer, although both the NAB and AiG surveys suggest there has been a little more life in demand for consumer services (retail sales also covers cafes & restaurants).