CommBank flags retail spending increases ahead of Christmas

Retailers should be encouraged by spending increases in the lead-up to Christmas, according to Commonwealth Bank’s Business Sales Indicator for the month of October.

The monthly report showed an 18.2 per cent annual increase in retail spending in October, the strongest growth of any sector, including amusement and entertainment, where spending grew 13 per cent year-on-year.

In trend terms, amusement and entertainment spending grew 1.7 per cent in October compared to the previous month, outpacing retail spending, which grew 1.5 per cent.

“Consumers are still happy focusing their discretionary spending on things they enjoy, like eating out at cafes and restaurants,” CommSec chief economist Craig James said.

“They are also going into stores to buy things, taking advantage of the continued discounting and falling prices of everyday goods that we are seeing.”

Commonwealth Bank’s BSI report is just one of many indicators of consumers’ increasing preference towards spending their limited discretionary income on experiences, rather than things.

Growth in spending economy-wide

October saw a 0.7 per cent increase in spending economy-wide, the 20th consecutive month of growth, while the trend of annual sales growth eased from 10.5 per cent to 10.4 per cent – still far above the long-term average pace of 5.6 per cent.

Spending in Queensland grew significantly (14.3 per cent) over the year, while Victoria (12.2 per cent), Western Australia (10.7 per cent), South Australia (9.2 per cent), the ACT (8.9 per cent), NSW (7.8 per cent), and Tasmania (6.8 per cent) all enjoyed annual growth.

The Northern Territory saw a 1.1 per cent decrease in overall sales compared to October 2017.

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