Citi analyst Craig Woolford covers off how retailers ended 2016 and what’s ahead in 2017.
Australian retail, on balance, had a strong end to 2017 with retail sales growing by 3.9% in November from a very sluggish October and December trading finishing strongly.
Apparel was a standout with November clothing sales increasing by 8.4% from 2015, benefiting from the Black Friday and Cyber Monday sales events. Supermarket retail sales also grew 2.7% in November accompanied by vigorous liquor sales up 5.7% on the same time last year.
The gap between discretionary and food retail sales growth narrowed over 2016, with discretionary retail up 4.1% and food retailing up 3.6% for November 2016. The good news is that food retailing is likely to accelerate as the year continues.
One of the notable trends for the year was the shift in retail spending patterns at Christmas with online retail, Black Friday sales at the end of November and early Christmas discounting shifting sales forward. With Christmas falling on a Sunday in 2016, the usual pre-Christmas sales surge arrived later then usual. Christmas sales were solid for most retailers despite relatively unfavourable weather patterns.
The hot gifts under the tree in 2016 were ‘back to the future’ in areas such as board games and fashion, with the new toy Hatchimals selling out early despite its hefty price tag. There were fewer electronic gifts than in 2015.