Sales were flat in Victoria, which was hit hardest by fires in the first week of January. Sales were also flat in Western Australia while they lifted by 1.1 per cent in Tasmania.
The ABS’ quarterly economy-wide surveys director, Ben James, said the December fall had come after a strong November that had been inflated by the Black Friday sales.
“There were also some effects from bushfires and associated smoke haze apparent in NSW data. Specifically, food retailing and cafes, restaurants and takeaway food services were negatively impacted,” he said.
Publicly listed retailers have been warning for several weeks that sales fell sharply in the wake of the fires. These warnings pre-date the advent of the coronavirus outbreak.
Figures on Wednesday showed new car sales at their lowest level for January since 2003. Car sales are not included in the retail sales figures.
Prime Minister Scott Morrison on Thursday said while there would be an economic hit from the virus and the bushfires, there would be a recovery.
“There will also be a recovery and there will be a recovery to the bushfires with the extensive works that will be undertaken with rebuilding and equally you can expect down the track,” he said. “We expect a hit, particularly in this quarter, on the coronavirus, and how much more it extends beyond that really does depend on how this virus continues to play out at a global level.”
Economists at Westpac on Thursday said the economy was likely to show no economic growth through the March quarter because of the coronavirus outbreak, but added this would be followed by a rebound in the June quarter.
“National output stalls in the March quarter (downgraded from growth of 0.4 per cent), with a rebound in the June quarter, 0.8 per cent (revised up from 0.5 per cent), while growth is around a 0.6 per cent pace over the following two quarters,” they said in a research note.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.