WA retailers were hit by a big drop in sales over December, down 4.7 per cent on the prior month.
Western Australian retailers were hit by a big drop in sales over December, down 4.7 per cent on the prior month.
The numbers give an indication that the Reserve Bank of Australia’s efforts to stop inflation by slowing spending may be starting to work, after a record 3 percentage point lift of the official cash rate over 2022.
WA suffered the equal worst fall in retail sales of all states, tied with Victoria, according to today’s data from the Australian Bureau of Statistics.
But it wasn’t all bad news for WA.
December’s sales were still 5.9 per cent stronger than they had been in the same month of 2021.
That means sales grew just below the pace of inflation.
Nationally, sales were down 3.9 per cent.
Shoppers pulled back on spending at department stores, on clothing, and household goods.
St George Economics said it was the sharpest fall in national sales since August 2020, but cautioned that spending may have been brought forward to November,
“There are now clearer signs spending is slowing and the RBA’s interest rate hikes are reducing demand,” the bank said
“The full impacts of the 300 basis points of rate hikes from last year are yet to fully flow through to consumers.
“We continue to expect retail trade will ease over 2023 as consumers adjust to higher interest rates, higher rents and the higher cost of living.”
APAC economist for job site Indeed, Callam Pickering, said retail sales had fallen well short of expectations in December.
It had been the largest non-pandemic decline in spending nationally since the introduction of the GST in 2000, Mr Pickering said.
“This partly reflects changing seasonal patterns, such as Black Friday sales in November, but also the impact of higher cost-of-living.”
“With cost-of-living pressures so acute this year, households may have been even more sensitive than normal to this year’s Black Friday sales.”