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S&P/ASX 200 : Australia's Preliminary Retail Sales Climb 9.4% in December, But Down 4.2% on Monthly Basis as Victoria Demand Eases

01/22/2021 | 03:02am
(MT Newswires) -- Preliminary retail sales in Australia for December 2020 rose 9.4% year over year to A$30.32 billion ($23.45 billion), but fell 4.2% on a seasonally adjusted basis after the pent up demand that was seen in November subsided last month, the Australian Bureau of Statistics said in a release Friday.

"Falls were recorded in five of the six retail industries, led by household goods retailing. Household goods retailing, other retailing, department stores, and clothing, footwear and personal accessory retailing, fell after large rises in November," the bureau's director of Quarterly Economy Wide Surveys, Ben James, said in a statement.

Back in November, Australia's retail industry benefited from the easing of lockdown measures in Victoria, which led to substantial pent-up demand, while new product releases such as the release of new iPhones and new game consoles during the month, as well as Black Friday sales, further spurred consumer sentiment,

In December, the tightening of COVID-19 restrictions, particularly in Australia's most populous state of New South Wales, hurt food retailing as the measures limited household gatherings. Food retail sales across Australia fell 2%.

As consumers splurged on household goods during the Black Friday sales in November, the sub-sector's turnover last month fell 9% on a seasonally adjusted basis.

Victoria was the worst-performing state last month, falling 7% from November after a 22% surge in November. New South Wales followed with a 5% decline amid business restrictions in parts of Sydney when the city recorded a resurgence of local coronavirus infections.

Meanwhile, National Australia Bank's director for economics and markets, Tapas Strickland, said the drop in December "should not be taken as a signal that the economy is weakening." The economist said the latest figure suggests another strong contribution to GDP growth in the fourth quarter of 2020.

ANZ Research economists also echoed the outlook, saying the drop is not a cause for concern as the monthly result "still translates to strong retail growth compared to last year."

"Even without border restrictions and uncertainty, a positive result for December would have been very unlikely. Strong drivers of retail growth coincided in November, including the reopening of retail in Melbourne, Black Friday sales and key electronic product releases. This created a spike in spending unlikely to be matched the very next month," ANZ's Adelaide Timbrell and David Plank said.

© MT Newswires 2021
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