Australian retail sales increased minimally last December as more consumers opted to purchase on Black Friday in the prior month, reflecting cost of living pressures.

Australian Bureau of Statistics (ABS) data showed that shoppers spent $35.1 billion in December, up 0.8 per cent year over year.

“Today’s retail trade figures confirm that Australian consumers pulled forward much of their Christmas spending to November’s Black Friday sales,” said Anneke Thompson, chief economist at CreditorWatch.

“Very tight household budgets and low levels of available discretionary spending means consumers were searching for savings when buying their Christmas presents and other household goods.”

Department store sales climbed 3.7 per cent to $1.83 billion, followed by food sales which grew 1.4 per cent to $14.18 billion.

Cafes, restaurants, and takeaways inched 1.6 per cent higher to $5.29 billion, while clothing, footwear, and accessories rose 0.5 per cent to $2.86 billion.

Household goods sales fell 3.2 per cent to $5.63 billion.

“Throughout Christmas and the Boxing Day sales, we saw bargain-driven shoppers, who actively sought out the best deals and looked for value purchases,” said Australian Retailers Association (ARA) CEO Paul Zahra.

“Department stores fared particularly well, capitalising on the Boxing Day sales and the final few weeks before Christmas with a range of promotional events.”

NSW saw a sales decline of 0.6 per cent but booked the largest sales value among all states at $11.0 billion.

Meanwhile, Tasmania saw the highest sales growth of 3.1 per cent with a sales value of $713 million.

Zahra noted that next week, the Reserve Bank of Australia’s decision will set the tone for retailers in the coming months.

“We’ve seen reduced spending growth in December. Another interest rate increase would be crushing for retailers,” said Zahra.