Food and clothes drive December retail sales growth

Apparel (up 6.7 per cent) and groceries (up 6.6 per cent) reported the biggest increase in trade in December with lodging (up 4.1 per cent) and electronics (up 3.5 per cent) also recording an uptick. There were year-on-year falls for home furnishings (down 2.4 per cent) and fuel and convenience (down 4.1 per cent).

Australian Retailers Association chief executive, Paul Zahra, welcomed the results and said achieving spending growth in December, during the peak of Australia’s shopping activity, is encouraging for retailers especially in a period of economic uncertainty.

“Home Furnishings and Fuel and Convenience were down on the previous year, due to a higher sales base last year, as these sectors had record growth last year due to the lockdowns ending,” he said.

“The growth in apparel sales is particularly outstanding due to the unseasonal cool Summer. Gross margins, however, may have been impacted as retailers worked to clear current inventory.

“These December results are a testament to the resilience of the retail industry and set a good foundation as we anticipate a period of uncertainty in 2023, with inflationary pressures and the rising cost-of-living.

“We’re aware that it will be a challenging environment for businesses, particularly small businesses on tighter margins, as they continue to battle rising operating costs associated with fuel, energy, labour, supply chains and rent.”

Mr Zahra flagged that inflation has also played a factor in the increased sales numbers.