The seasonally adjusted figure from the Australian Bureau of Statistics reflects the growing impact of November online sales events on retail trade data.

Retail turnover was up a revised 1.6% in November 2023 after a 0.2% drop in October.

ABS head of retail statistics Ben Dorber attributed the large fall in retail turnover in December to an improvement in establishing evolving seasonal trends in the data as well as a fall in discretionary spending.

"Consumers brought forward some of their usual December spending to November to take advantage of Black Friday sales," Mr Dorber said.

“This shift in spending from December to November reflects the growing popularity of Black Friday sales and the impact of cost-of-living pressures, with consumers seeking out bargains and taking advantage of discounts in November."

While there was a large seasonally adjusted fall in December, retail turnover rose 0.1% in trend terms.

"This shows that underlying retail spending remains subdued when we look through the volatile movements over recent months in the lead up to Christmas," Mr Dorber said.

While today's December figure showed considerably lower month-on-month turnover, it was still 0.8% higher than it was the previous year.

The fall in monthly retail trade in December was mainly driven by lower spending on household goods, down 8.5%, and in department stores, down 8.1%.

Food retailing was the only spending category to record a gain, rising marginally in December by 0.1%, seasonally adjusted.

Retail turnover fell in every Australian state and territory with the largest falls in Western Australia and the ACT, both recording 3.8% drops.

Consumer credit demand falls

In-line with the retail trade numbers, new monthly consumer credit figures show a 5% drop in demand during the December quarter.

Analytics company Equifax’s Quarterly Consumer Credit Insight showed the overall fall in credit demand was driven by slowing demand for credit cards, although the numbers were still 1.2% up on the same quarter the previous year.

The data also showed a decline in personal loan applications (down 0.7%) while demand for buy now pay later (BNPL) services continued to plummet, falling 18.7%, compared to the same period the previous year.

However, this represented a slowdown in the rate of decline for BNPL products, Equifax said.

ABS lending data for November 2023 showed a 5.6% drop over the month in demand for personal loans, down to $2.38 billion.

Credit card arrears remain above 2022 levels, with accounts more than 90 days overdue 15% higher in the December quarter compared to the corresponding quarter the previous year.

Yet today's figures show a slight recovery in mortgage applications, climbing 0.5% over the same quarter in 2022. This marks a return to positive growth for the first time since 2021.

Over the same period, car loan applications also showed a notable 3.9% increase.

Consumer confidence slips with tax-cut changes

Meantime, a leading consumer confidence index recorded a drop of almost 2 points this week.

ANZ-Roy Morgan analysts are linking the weekly fall in the Consumer Confidence Index to changes to the promised stage-three tax cuts, announced by the Albanese government last week.

The weekly index dropped 1.9 points to 82.5 this week, its lowest level in 2024 so far.

The index is now 4.3 points below the same week a year ago but still 4.5 points above the 2023 weekly average of 78.

The data shows consumer confidence is down in New South Wales, Queensland, Western Australia, and South Australia but up in Victoria.

Currently, just under one in five Australian say their families are ‘better off’ financially than this time last year. Half say their families are ‘worse off’.

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