Black Friday brings pre-Christmas boost to retailers
Short-term, high discount sales including Black Friday, Click Frenzy and Cyber Monday have given struggling retailers a pre-Christmas boost according to latest official data.
Clothing, footwear and personal accessories drove the increase, with sales in these items growing by 0.5 per cent growth in November.
Shoppers browse the aisles during a Black Friday sale at a Target store, Friday, Nov. 23, 2018, in Newport, Ky. (AP Photo/John Minchillo)Credit:John Minchillo
"It's a stronger Black Friday effect," said NAB economist Kaixin Owyong.
"Footwear had the biggest gains in the month and that's where we saw a lot of heavy discounting."
Ms Owyong said the "moderate growth" in November was not enough to offset concerns of softer consumer spending but rather indicated shoppers were bringing their Christmas purchases forward.
Australian Retailers Association executive director Russell Zimmerman said the numbers were weaker than the group had expected but that clothing and footwear contributed to a "good strong November".
"These are one of the things that people will go and purchase online."
Mr Zimmerman described a "black weekend" for the bricks and mortar retail outlets, where sales persisted in-store across the four days from November 23.
"They've probably got an increase in their revenue, but how much loss of margin have they had to make on it?"
Mr Zimmerman said that consumers are facing "pretty tough" conditions at the moment, citing higher energy prices and sliding house prices as impacting their spending habits.
That, combined with an increased focus on sale frenzies, are pushing consumers towards bargain-hunting spending habits.
"If you need new sheets or towels or back to work clothing you're going to want the most discounted price you can possibly get," said Mr Zimmerman.
In contrast, HSBC chief economist Paul Bloxham said the retail figures showed there was "limited evidence" towards the negative wealth effect.
"New South Wales retail numbers actually rose in the month and there's still growth in household good sales, one area where you might expect to see a greater weakness," Mr Bloxham said.
"The main thing is that people have jobs. We might be seeing house prices fall in the major cities but as long as people have jobs their continuing to feel confident and spending is continuing to grow."
NSW was the weakest in retail growth for the month but in seasonally adjusted terms it rose 0.8 per cent, followed by the ACT at 1.6 per cent, Western Australia at 0.6 per cent and Victoria at 0.1 per cent.
Foot retail experienced the slowest growth, rising by 0.2 per cent in November, which Mr Zimmerman put down to drought conditions.
The figures for December will now be closely scrutinised to see if shoppers did their Christmas purchasing in November.
Some retailers have already announced their Christmas performance. Apparel chain Kathmandu reported a weaker than expected Christmas and Boxing Day trading period while Noni B told investors it had a surprise on the upside.
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