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Cost of living pressure causes dip in December retail sales | Australia news

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Retail sales fell 3.9% in December on a seasonally adjusted basis as cost of living pressures and rising mortgage repayments began to hit households.

ABS head of retail statistics, Ben Dorber, said seasonal spending patterns over the Black Friday and holiday period were evolving. In November, retail turnover increased by 1.7%.

“While there was a strong rise in original terms for December, as is expected in the lead-up to Christmas, this year’s rise in original terms was smaller than those typically seen in past December months,” he said.

“This has led to the large seasonally adjusted fall.”

The biggest declines were concentrated in Black Friday’s gains, including department stores – which fell 14.3% – and clothing, footwear and personal accessories, down 13.1%.

Food retailing, however, picked up 0.3% and remained virtually unchanged from November.

Dr Sarah Hunter, a senior economist at KPMG, said the figures showed a “surprisingly sharp drop”.

“Households are clearly feeling the squeeze from higher prices and rising mortgage costs, and many people continued to redirect their spending towards services – demand for air travel and local tourism remains buoyant, and in contrast to most other categories spending in cafes and restaurants was broadly flat on the month.

“Today’s data will give the RBA pause for thought. Households are clearly considering their spending decisions, and with consumption the largest share of GDP this will have a significant impact on the overall GDP figure.

“But with inflation still very strong and broad-based, the board is likely to decide that it needs to implement at least one more hike next week before a possible pause.”


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