A REBOUND in retail sales in October is likely to be overshadowed by bigger gains in November with the reopening of Victoria, as spending patterns continue to normalise.
Data from the Australian Bureau of Statistics showed a 1.4% rise in sales values in October compared to September, lower than the 1.6% preliminary reading. The rise almost entirely driven by a 5.1% surge in Victoria as the state lifted shopping restrictions in the final days of the month.
Mixed results were seen elsewhere. New South Wales, South Australia and Western Australia also rose, but falls were recorded Queensland, Tasmania and Northern Territory.
Outside of Victoria, retail sales rose only inched upwards by 0.3%.
Consumption patterns normalised further during the month, with sales of household goods and of food slowly returning to pre-COVID levels.
Meanwhile, café and restaurant spending rose by 5.4%, although the segment is 11% below pre-virus levels. Clothing, footwear and personal accessory retailing grew 6.8%, while other retailing was up 2.0%, and department stores by 4.5%.
“Looking ahead we think retail sales will rise strongly again in November. The full reopening of the Victorian economy should deliver another boost to retail sales,” Capital Economics economist, Ben Udy said.
“After all, sales in Victoria are still 10% below their pre-virus level.
“And sales in other states are actually above 11% above their pre-virus levels. Even if Victoria only returns to pre-virus levels in November that would cause another 1.5% rise in retail sales, but we suspect sales will move well above pre-virus levels before long as has happened in all other states.”
Sales may also have been boosted by Black Friday sales.
Annual data shows October spending was 7.1% higher.
“Looking further ahead though, the continued reopening of the economy should result in a shift back from spending on goods towards services. As such, it seems likely that retail sales will fall even as overall consumption recovers further,” Udy said.
