Australian retail sales rose 4.1% in November 2024. In non-food retail, sales were up 4.0%, while the CAGR growth over five years was 7.3%. November benefited from a bigger Black Friday event but also from warmer, drier weather. Supermarkets, liquor, fashion and cafes/restaurants all had much stronger growth. The sales trends have improved in recent months, which may be a little stronger than true trends because of favourable weather and the heavier discounts enticing shoppers. We expect some softness in the March 2025 quarter.

The outlook for retailers this festive season is constructive. Perhaps it is best characterised as a sign of the times where consumers are acting cautiously but do have money to spend. Therefore discounts are working. Black Friday event sales were likely up 4%-7% for many retailers based on our feedback. We expect the strongest growth was online. Amazon took share. Home appliances, fashion and beauty have done best. However, there are more discounts.

The festive season is the key profit driver for almost all Australian retailers. Its shape has shifted meaningfully over the past decade as Australian shoppers have embraced Black Friday promotions. We expect an even bigger November sales period in 2024 as more retailers and consumers position for Black Friday deals. While November gets bigger, it has largely been at the expense of December sales. The timing of promotional events is also shifting a little and we may see promotions earlier in November this year. The primary risk for retailers is longer, deeper discounting impacting gross profit margins. 

We are entering the silly season for retail. Over recent years promotions have started earlier with a rapid embrace of offshore events like Black Friday. Achieving a good November and December can make or break a retailer’s year. We expect earlier and bigger promotions this November, but it’s not a sign of desperation. These promotions are planned and aimed at stimulating sales. Even so, given huge November events in 2020 and 2021, it will be hard to deliver more than 3% sales growth in our view. With a swing back to stores this year, we expect December to be stronger.