There was a slight increase in consumer confidence this week, the third out of four so far this year, according to the latest ANZ-Roy Morgan data. However, retail turnover tumbled in December, across all states and territories, largely as result of changing seasonal spending patterns.

Driving the small consumer confidence increase was a slightly more positive sentiment around whether now is a ‘good or bad time’ to buy a major household item. Nationally the consumer confidence measure was mixed, up in New South Wales, Queensland and Western Australia, but down in Victoria and South Australia.

ANZ senior economist, Adelaide Timbrell said after a jump at the start of the year, confidence has remained relatively stable over January. “Household inflation expectations dropped 0.6% despite the news last week that annual inflation hit a 32-year high in Q4 2022. This is a signal that household inflation expectations remain somewhat anchored despite accelerating inflation through 2022.”

National Retail Association CEO Greg Griffith said, although he viewed the overall statistics as a positive indicator for the sector, The retail sector is bunkering down for slowdown in spending that is expected to continue for the first half of 2023.

“Even though December’s nosedive breaks an 11-month streak of recorded growth for retail, year-on-year, growth has risen by 7.5%. A lot of money that was spent on Christmas celebrations was spent in November, which recorded a 1.7% increase for the month.

“With the cost-of-living crisis ongoing, and the Reserve Bank potentially lifting interest rates once again when they meet next week, consumers will reel in their discretionary spending until inflation declines later this year,” he said.

According to ABS head of statistics Ben Dorber, the large fall in December suggested that retail spending is slowing due to high cost-of-living pressures.

“While there was a strong rise in original terms for December, as is expected in the lead-up to Christmas, this year’s rise in original terms was smaller than those typically seen in past December months, which led to the large seasonally adjusted fall,” he said.

Turnover fell in industries previously boosted by November Black Friday sales with department stores taking the largest hit at 14.3%, followed by clothing, footwear and personal accessory retailing, down 13.1% and household goods retailing declining 7.8%.