Investing.com– Australian retail sales rose slightly in the fourth quarter of 2023, aided by increased discounts during the holiday season, although overall retail turnover during the quarter remained close to three-year lows
grew 0.3% quarter-on-quarter in the three months to December 31, data from the Australian Bureau of Statistics (ABS) showed on Tuesday. The print improved from a 0.1% fall seen in the third quarter.
Quarterly retail turnover rose slightly to a seasonally adjusted A$98.30 billion, barely rising from a three-year low of A$97.97 billion seen in the prior quarter. The figure was also down 1% from the December quarter in 2022.
A final monthly reading for December showed a 2.7% month-on-month decrease in , much worse than estimates for a rise of 0.1%, and a sharp reversal from a 1.6% rise seen in November.
November’s reading was boosted chiefly by the Black Friday event, and was an aberration in an otherwise subdued year for retail spending.
Australian retail sales slowed drastically through 2023 as the effects of high interest rates were baked into the economy. Higher rates factored heavily into increased mortgage and housing costs.
“Sales volumes per person have fallen every quarter since reaching a peak in June 2022, although they remain above pre-pandemic levels,” Ben Dorber, ABS head of retail statistics, said in a note.
Pressure on household savings from a higher cost of living also kept retail spending subdued, with a dismal holiday season being a major indicator of a slowdown.
The retail sales data comes just hours before a , where the central bank is widely expected to keep rates at a near 12-year high.
While inflation weakened substantially in recent months, it still remained well above the RBA’s 2% to 3% annual target range- a scenario that is likely to see the bank keep rates unchanged in the near-term.
Higher rates present more near-term headwinds for retail spending, as consumers cut down on discretionary purchases amid growing pressure on household savings.
Still, Tuesday’s data showed that retail prices were also steadily declining- a trend that could see weaker inflation in the coming months.