Add Category
Updated
The release of the iPhone X and the Black Friday sales frenzy lifted spending towards the end of last year.
Retail sales rose 1.2 per cent in November, according to the latest data from the Bureau of Statistics (ABS), which is the third straight month of gains.
The figures came in well ahead of expectations, with economists polled by Reuters tipping a more modest 0.4 per cent rise for the month.
Overall, sales of household goods experienced the biggest jump, with electrical and electronic goods turnover rising 9.3 per cent.
"Other retail" was the second best performing category.
"Seasonally adjusted sales in both these industries are influenced by the release of the iPhone X and the increasing popularity of promotions in November, including Black Friday sales," Ben James from the ABS observed.
Department store sales were less rosy, down 1.1 per cent for the month.
Online shopping continued to increase its share of the sales, contributing 5.5 per cent to total retail turnover — its biggest contribution since the ABS began tracking online spend.
AMP Capital senior economist Diana Mousina thinks the ABS is still working on its coverage of the online retail sector.
"I think that probably underestimates total online spending," she said.
"I wouldn't be surprised to see that number moving closer to 10 per cent or maybe even higher."
Trend suggests retail challenges continue
Looking at the more stable trend figures, which would reduce the one-off impact of the new iPhone, sales rose a more modest 0.1 per cent in November.
"This confirms our view that underlying conditions for households remain challenging," BIS Oxford Economics' head of economics in Australia, Sarah Hunter, said.
"2018 is likely to be another relatively subdued year for growth in household expenditure."
“There are still a lot of pressures on the consumer in Australia, the main one being that wages growth is still running at quite a low level," echoed Diana Mousina.
"Consumers are still facing high household debt and the risk of declines in dwelling prices."
"Households appear to be in a grinding slowdown driven by balance sheet constraints," added JP Morgan senior economist Ben Jarman.
"The next retail reading will be important in confirming this trend."
Attention turns to Christmas sales figures
Economists will now be asking whether the positive bump can carry through to the crucial December and January holiday trading period.
"I think the December numbers will probably see a bit of a softer print, maybe even a small negative, because you will see the one-off impacts falling through," said Ms Mousina.
Before the release of the November ABS data, some retail analysts were tipping a late surge of sales ahead of Christmas.
"Overall, retailers largely met their sales targets after a soft start to the Christmas trading period," wrote Citi analysts.
"Our feedback suggests this late surge in sales was sufficient for most retailers to hit their targets for same store sales and inventory levels."
Morgan Stanley analysts expect strong iPhone X sales to have helped JB Hi-Fi over the period. It upgraded its rating on the stock to "overweight".
"Channel checks indicate strong Christmas trading for JB, driven in part by iPhone X and flat panel TVs," wrote Morgan Stanley analysts.
At 1:20pm (AEDT), JB Hi-Fi shares were the best percentage performer on the ASX 200, up 5.3 per cent to $28.23.
Topics: retail, business-economics-and-finance, economic-trends, australia
First posted