It looks like the Christmas period was a horror show for Australia’s retailers

  • It looks like the Christmas and New Year trading period for Australian retailers was dire.
  • From the start of November to early January, the value of credit card transactions at retailers fell 3.7% compared to a year earlier.
  • The emergence of Black Friday and Cyber Monday sales may have brought forward spending into November, meaning there may be upside risks to Australia’s November retail sales report that will be released on Friday.

If the early indications are anything to go by, the Christmas and New Year trading period for Australian retailers was one to forget.

Not only does it look like foot traffic was down quite substantially, but spending levels were too, according to credit card transactions processed through the Commonwealth Bank’s network, Australia’s largest retail bank.

“The Christmas trading period looks to have been disappointing,” says Michael Blythe, Chief Economist at the CBA.

“The cumulative dollar value of the Christmas spend in November, December and the early part of January was 3.7% lower than the same period a year earlier.”

Blythe says that based on spending patterns seen during this period, the average value of individual Christmas presents was $94, down 4.5% on the level seen a year earlier and some 29% from the record peak set in 2007, just before the onset of the global financial crisis.

Spending in the lead up to Christmas was particularly weak compared to what was seen in 2017, as well as the average level seen over the past decade.

Blythe said the decline in cumulative spending compared to 2017 narrowed slightly during the post-Christmas sales, indicating that steep discounts may have encouraged spending during this period.

Still, it was not enough to completely close the gap in cumulative spending compared to 12 months earlier.


While a concerning outcome, particularly when inflation and population growth are taken into consideration, Blythe cautions that emergence of Black Friday and Cyber Monday sales in late November has made analysing spending patterns more difficult.

Based on transaction data during this period, Blythe says spending on electronic equipment, apparel and furniture surged by 205%, 127% and 77% respectively this year compared to the average daily spend traditionally seen during November.

That hints suggests there’s a risk that Christmas spending may have been brought forward, creating potential upside risks for Australia’s retail sales report for November that will be released on Friday.

Separate analysis from the National Australia Bank (NAB) suggests sales may have increased by 0.4% during November, up from 0.3% in October. Alan Oster, Chief Economist at the NAB, described the result as “weak” in underlying terms given the likely boost from Black Friday sales.

He also warned that if spending was brought forward into November by these sales, it poses the risk for a weak retail turnover figure for December.

Based on the analysis from the Commonwealth Bank, that looks to be more than a risk, particularly that given the sheer size of the data set available to Blythe and his team the numbers are likely to be representative of what was seen across the nation.

While we will have to wait several months to get a clear picture on spending during this period, the early signs are not looking good.

Policymakers at the Reserve Bank of Australia (RBA) will be hoping the signals are incorrect given it expects that broader household consumption will grow by around 3% this year, an outcome it expects will help keep annual GDP growth running at over 3%.

With new car sales falling sharply in recent months, that forecast is looking optimistic based on recent evidence.