Australian consumers took to the shops in a big way last weekend, spending 22% more than they did during the Black Friday and Cyber Monday sales events of 2022.
That’s according to transaction data collected by NAB over the four-day period.
The increase in spending came despite the Reserve Bank of Australia (RBA) having hiked rates by 150 basis points over the 12 months leading up to the sales events.
The central bank’s hiking spree is intended to slow consumer spending and has arguably helped spur the cost-of-living crisis.
NAB executive for small business Ana Marinkovic said businesses are being driven to find “creative” ways to attract customers in the current environment.
“Many Australians will use these sales to grab a bargain or do their Christmas shopping, while for businesses it’s an opportunity to end the year on a strong note,” she said.
The Black Friday sales event drove retail turnover up 1.4% to a then-record high in November 2022.
Nearly $36 billion was spent by Aussie consumers in that month, the Australian Bureau of Statistics (ABS) revealed.
“While we typically see a rise in spending around Black Friday sales, the strong seasonally adjusted rise in November 2022 shows that the effect is increasing over time, as the event has become more common across retailers and sales periods become longer,” ABS head of retail statistics Ben Dorber said at the time.
Mr Dorber last week noted that it appears consumers “hit the pause button” on spending in October, likely in anticipation of the this year's sales period.
That might have had an impact on yesterday’s inflation read, revealing the Consumer Price Index (CPI) moderated to 4.9% last month.
That was down from 5.6% in September and lead to suggestions that inflation could come in below 4% by the end of 2023 – far closer to the RBA’s target of 2% to 3%.
“The latest figure continues the downward trajectory in the CPI and is below market expectations of 5.2%, suggesting the RBA may have been hasty in raising interest rates at its November meeting,” Real Estate Institute of Australia president Hayden Groves said.
The RBA hiked the cash rate 25 basis points to a 12-year high of 4.35% on Melbourne Cup day.
A surge in spending could feasibly increase expectations of another rate hike early in the new year; economists at NAB are already forecasting a February hike.
Meanwhile, those at Westpac and ANZ warn the first meeting of 2024 will be live and CommBank expects 4.35% will be the peak.
Image by Erik Mclean on Unsplash.
