Consumer sentiment positive but a comparatively subdued reaction to the end of lockdowns

Consumer sentiment increased by 0.6% in November 2021 following a slight reduction in October. Whilst in positive territory, the subdued reaction to the end of restrictions across all states and territories may be a concern for retailers hoping for a massive Christmas period. Retail sales released for September showed an increase of 1.3% after falls in the preceding three months. Online retail sales continue to remain strong with an increase of 3.3% in September 2021.

Consumer confidence

1 month
3 months
12 months
0.6%
1.2%
(2.2%)

Source: Westpac – Melbourne Institute Consumer Sentiment Index

 

Consumer sentiment increased by 0.6% to 105.3 in November 2021 according to Westpac-Melbourne Institute’s Consumer Sentiment Index. This was a comparatively small increase when compared to the jumps seen at the end of the lockdown periods last year. While positive, the index remains 11% lower than the high point in April this year and in fact below September 2021, before the widespread easing of restrictions. This suggests a consumer who is positive but perhaps a little weary after long lockdowns in New South Wales and Victoria. There are also emerging concerns around inflation and interest rates which may have tempered the euphoria.

In the lead up to Christmas, retailers will have to work hard to beat recent sales records now consumers have other options to spend their money on, and holidays to save for.

Retail sales

1 month
3 months
12 months
1.3%(3.1%)
2.1%

Source: Australian Bureau of Statistics

 

The most recent ABS retail sales data released for September 2021 showed an increase of 1.3%, however seasonally-adjusted monthly sales remained below $30 billion for the third consecutive month, being the only three months this has been recorded since October 2020. Sales have tapered off over recent months with the September sales being 4.8% lower than the high point in May 2021 ($31.2 billion). That said, September sales were 1.7% higher than the corresponding month last year, and 7.5% above September 2019. Sales continue to vary by state with increases in South Australia (0.9%) and Western Australia (1.4%) and material increases in New South Wales (2.3%) and Queensland (5.2%). Victoria experienced a decline of 2.1% and the Australian Capital Territory experienced a sharp decline of 12%.

Online retail sales

1 month
3 months
12 months
3.3%
19.6%
26.9%

Source: NAB Online Retail Sales Index

 

Online retail sales recorded an increase of 3.3% in September 2021, the fifth consecutive month of growth. That said, the growth in September was the lowest monthly growth of those five months, reflecting a potential slowing before what retailers hope is the biggest month of the year; November, when four key online sales events occur. Online sales for the twelve months to September 2021 represented 14.3% of total retail sales during that period, which was 28.3% higher than the previous corresponding period.

 

AUTHORED BY

Damien Pasfield

Damien Pasfield
Director, Sydney
T: +61 2 9338 2691
E: dpasfield

Ciaran Mannion

Ciaran Mannion
Senior Manager, Sydney
T: +61 2 9248 9929
E: cmannion