The recent bushfires and Black Friday sales led to worse than expected December retail trade figures.
Retail turnover fell by 0.5% in December (seasonally adjusted) according to the latest figures from the Australian Bureau of Statistics (ABS).
This follows a 1% rise in November, mostly led by the Black Friday and Cyber Monday sales.
Ben James, director of Quarterly Economy Wide Surveys said the recent bushfires may have had an impact on December's weak figures, particularly for New South Wales which recorded a -1.2% fall in spending.
"There were also some effects from bushfires and associated smoke haze apparent in New South Wales data. Specifically, food retailing and cafes, restaurants and takeaway food services were negatively impacted," Mr James said.
Despite December being one of the biggest trading months on the retail calendar, department stores recorded the biggest fall (-2.8%) in consumer spending. This was followed by clothing, footwear and personal accessory retailing (-1.5%), restaurants and takeaway food services (-0.9%), food retailing (-0.3%), and household goods (-0.3%).
Westpac senior economist Matthew Hassan said the December figures were worse than the 0.2% decline anticipated.
"The December retail report was a mixed bag with a sharper than expected pull back in the December month, suggesting the pull-forward effect associated with Black Friday sales was more pronounced," Mr Hassan said.
Online retail sales appear to have fared better, growing by +13.3% year on year, according to NAB's Online Retail Sales Index for December.
NAB chief economist Alan Oster said the strength in December was boosted by the weekend continuation of the Black Friday sales event into the Cyber Monday period.
"In November we looked at the impact of the Black Friday sales event. We now include the surrounding days to see the effect of the four-day sales event between Black Friday and Cyber Monday. The spike in sales for these days was large enough that it is likely the cause of shifting seasonal factors, whereby December this year increased in importance," Mr Oster said.
All categories, except fashion recorded sales growth in month-on-month terms. The biggest sales category, homeware and appliances, continues to grow at a rate lower than the overall (1.5%). Grocery and liquor sales accelerated in December, likely due to the Christmas period.
'Amazon Effect' pulverising bricks-and-mortar retailers
The growth in online shopping has coincided with the collapse of a slew of Australian businesses, with a seemingly endless parade of retailers shutting up shop.
Earlier in the week, handbag and accessories chain Colette by Colette Hayman announced it would be placed into voluntary administration.
It's just one example of a number of retail collapses in recent months.
Women's fashion retailer Bardot faced the same fate in November, as did denim brand Jeanswest just weeks ago.
Discount department store Harris Scarfe collapsed last year as did menswear brand Roger David, while Oroton, EB Games, Bose, McWilliams Wines and Curious Planet are also in trouble.
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