Retail bounces back, Black Friday sales to hit $5.4 billion

States that have been spared the prolonged lockdowns of the last few months are leading the retail sales rebound, according to Mastercard SpendingPulse.

Retail sales across the country increased 4.2 per cent in October compared to the same time last year and are up 10.1 per cent on pre-pandemic levels in October 2019.

However, while the states that have been living free of severe restrictions continue to record positive sales growth including Queensland (up 5.3 per cent), Western Australia (up 5.2 per cent), South Australia (up 3.5 per cent) and Tasmania (up 4.7 per cent) when compared to October 2020, locked down NSW and ACT were down 1.1 and 12.2 per cent respectively.

Victoria, where retailers reopened at the end of October, saw an increase in sales of 12.4 per cent compared to October 2020, but that’s compared to their 100+ day second wave lockdown last year.

Australian Retailers Association CEO Paul Zahra says with 39 days to go to Christmas, and the worst of Covid now behind us, retailers are ramping up their operations and are looking forward to a positive festive trading period.

“Whilst it’s encouraging to see retail sales overall on the rebound in October, the results are mixed across the different categories and the states and territories,” he says.

“Department stores have recorded five consecutive months of negative sales growth, driven by the lockdown of Australia’s two largest cities, however, we are hopeful of a strong finish to the year. Christmas is a time when department stores shine with customers set to return in greater numbers to physical stores.”

Indeed, department stores recorded another sharp downturn in year-on-year sales (down 12.3 per cent) in October. However, there were marginal increases in sales of clothing (up 0.8 per cent) and food (up 1.7 per cent), while household goods experienced 14.2 per cent growth in sales compared to October last year.

“Retailers in Sydney reopened on 11 October, on 22 October in Canberra and on 29 October in Melbourne, so we are yet to see a full month’s worth of insights where lockdowns haven’t been a feature.

“There’s a lot of pent-up demand in those locations with consumers back out in droves, shopping and supporting their local businesses. Businesses will also have strong momentum behind them in the coming weeks leading up to Christmas, with consumers forecast to spend a record $5.4 billion in the Black Friday/Cyber Monday sales according to our research with Roy Morgan, so there’s a lot to look forward to. Consumer sentiment is upbeat and we’re set for a positive Christmas, despite the numerous Covid setbacks in 2021.”

The four-day shopping period (Friday 26 to Monday 29 November) ties in with the US thanksgiving holiday and is continuing to grow in popularity in Australia.

“For the past two years, November has beaten December as the biggest month for Australian retail sales throughout the year. Black Friday and Cyber Monday can be credited with this trend as people snap up some bargains and shop early for Christmas.

“We’re forecasting consumers to spend $5.4 billion over the four-day sales period. What began as an American shopping tradition has been embraced by Australians in a big way. This event is renowned for having the biggest pre-Christmas in-store and online bargains,” Zahra says.

Roy Morgan CEO Michele Levine says retail sales in November can expect a significant boost after around half of Australia’s population emerged from extended lockdowns during October.

“Retail sales for the Black Friday and Cyber Monday four-day shopping period are forecast to drive a surge in retail spending in November as Australians get in early for their Christmas gifts,” she adds.

“The end of long lockdowns in Sydney, Melbourne and Canberra will drive strong retail spending during the month to match, or even exceed, last year’s records.”