Retail CEO’s Black Friday message to Reserve Bank

The Australian Retailers Association has pleaded with the RBA not to use strong Black Friday retail sales as a reason to raise interest rates next week.

The Australian Retailers Association has pleaded with the RBA not to use strong Black Friday retail sales as a reason to raise interest rates in December. Picture: NCA NewsWire/ Dylan Robinson

Australian Retailers Association (ARA) CEO Paul Zahra has pleaded with the Reserve Bank of Australia (RBA) not to use strong Black Friday retail sales as a reason to raise interest rates when it next meets on Tuesday, December 5.

Speaking to news.com.au, Mr Zahra said: “My message to the RBA is that you can’t gauge the current economic situation from a promotion”.

Australian Retailers Association CEO Paul Zahra said retailers and consumers are still doing it tough. Picture: Darren England

He said that while the official sales data for the Black Friday period is yet to be quantified, anecdotal feedback from a range of retailers is that trading has been “good to very good” and “either met or exceeded their expectations”.

But Mr Zahra said that consumers and retailers are still doing it tough.

The ARA has forecast sales of $6.36 billion for the period, which also includes the Cyber Monday promotion.

If achieved, it would beat the previous Black Friday sales record by 3 per cent, but Mr Zahra said much of the spending is expected to have been brought forward from December.

As a consequence, Mr Zahra said Christmas trading is expected to be more subdued at just 0.6 per cent up on last year, with indications that many people have used the sales period to do their Christmas shopping early.

He added that evidence suggested that 25 per cent of gifts were bought over the weekend, with 50 per cent of festive gifts expected to be purchased by the end of November.

Mr Zahra hopes strong Black Friday sales won’t be used by Reserve Bank governor Michele Bullock as a reason to increase interest rates on December 5. Picture: Lisa Maree Williams/Bloomberg.

Figures from Shopify show merchants that use its platform in Australia recorded a combined $4.1 billion in sales on Black Friday.

The peak shopping hour was found to be 10am (AEDT) on Friday, with Melbourne, Sydney and Brisbane recording the most sales by value.

The most popular purchases were apparel and accessories, health and beauty, home and garden, food and beverages, and electronics, and the average spend per customer was $162.

November retail sales are likely to outperform October and December as people take advantage of sales to do Christmas shopping. Picture: NCA NewsWire/ Dylan Robinson

Australian Bureau of Statistics’ (ABS) retail sales data for October should also help to pour water on the risk of a pre-Christmas interest rate rise, with figures showing retail sales fell 0.2 per cent for the month.

The decline in spending was seen across many categories including clothing, footwear and household goods, as well as spending at cafes, restaurants, bars and department stores.

ABS head of retail statistics Ben Dorber attributed the fall in October to the Black Friday promotion.

“It looks like consumers hit the pause button on some discretionary spending in October, likely waiting to take advantage of discounts during Black Friday sales events in November.”

“This is a pattern we have seen develop in recent years as Black Friday sales grow in popularity.”