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Australians, responding to earlier sales declines, turned bargain hunters in the December 2023 quarter, as shown by the latest ABS data.
The welcomed rise follows a rough patch, with retail sales volumes dropping 0.1 per cent in September 2023 and 1.1 per cent in June 2023.
The good news? December saw a 0.3 per cent rise, representing a 0.8 per cent increase compared to December 2022.
However, a month-on-month decline of 2.7 per cent was recorded.
Prices are still inflated, but clothing and footwear get cheaper
“Compared to the same time last year, retail prices rose 2.4 per cent, down considerably from the peak of 7.6 per cent in December quarter 2022,” ABS Head of Retail Statistics Ben Dorber said.
Increases in retail prices were seen mostly in non-food related industries, led by household goods retailing which grew 2.3 per cent, followed by other retailing which grew 0.4 per cent and department stores, increasing 0.2 per cent.
Clothing, footwear and personal accessory retailing was the only non-food industry to record a fall of 1.6 per cent.
Most states and territories recorded a rise in retail volumes, however, Victoria was the only state to record a fall of 0.5 per cent, while the Australian Capital Territory remained unchanged.
Future macroeconomic outlook
Oxford Economics Lead Economist Ben Udy said the December rise was in part due to solid population growth and the fact that headwinds on households seem to be approaching their peak.
“These headwinds, including the drag from high interest rates, falling real incomes and the growing tax burden will keep pressure on households over the first half of 2023, limiting growth in consumer spending,” he said
“Even so, we think per capita consumption is close to its trough and will begin rising in earnest from the second half of 2024 as inflation eases, interest rates fall and households receive a tax cut.
“Aggregate consumption is also set to be supported by strong population growth which we think will prevent aggregate retail sales volumes from falling further in 2024.”
Nick Scali and Myer shares surge
And today, leading retailers Nick Scali (ASX:NCK) and Myer (ASX:MYR) have seen a spike in respective share prices on the release of 1H FY24 financial results.
Despite NCK reporting a 20.2 per cent drop in revenue compared to the PCP, the company did offer its shareholders a 35-cent dividend and exceed its net profit after tax guidance of $40-42 million to reach $43 million.
Meanwhile, Myer (ASX:MYR) posted an increase in sales for the period, matching its best first-half sales result on record.
That said, the company expects its 1H24 NPAT to be between $49 million-$53 million, which will be down on $65 million the prior year.
