The four-day shopping frenzy doesn't officially kick off until the end of November, but shoppers are already being served up Black Friday deals everywhere they look.
Billions of dollars are set to flow into the economy as Aussies gear up for a record spend on bargains during the Black Friday-Cyber Monday sales.
Shoppers are expected to spend $6.8b on the Black Friday sales. Picture: Getty
Budget-savvy shoppers are expected to splurge a record $6.8 billion at this year’s event, up 4% from last year, according to the Australian Retailers Association (ARA) in partnership with Roy Morgan.
The four-day event - from November 28 to December 1 - gives retailers a boost during the crucial peak shopping period, ARA CEO Chris Rodwell said.
But the bargain bonanza also offers insights on the health of household finances with some six million Aussies tipped to take part in the annual sales frenzy.
In recent years spending around Black Friday and Cyber Monday has shifted, said CBA head of Australian economics, Belinda Allen, as retailers extend discounting throughout October and November.
“That’s seeing a lot more spending over those two months as well,” Ms Allen said. “We've certainly seen that reflected in our own household spending data here at CBA, so we would expect to see that again this year.”
Last year, retail turnover rose 0.8% in November, with the impact of Black Friday felt right across the country, according to the Australian Bureau of Statistics.
This year participation among Australian retailers is set to grow with 44% expected to participate, up 3% from 2024 according to Deloitte. On average shoppers will spend $804 each.
More retailers will participate in the shopping bonanza than last year. Picture: Getty
It comes as inflation picked up in the September quarter, dampening hopes of an interest rate cut in the near future.
The 1.3% hike in quarterly inflation took the annual headline inflation rate to 3.2% - the highest it has been since the June 2024 quarter.
At its November meeting, the Reserve Bank of Australia decided to leave the official cash rate on hold at 3.6%.
Ms Allen said the upcoming sales could have a temporary impact on inflation.
Belinda Allen is the head of Australian economics at CBA.
Major sales periods like Black Friday-Cyber Monday often involve significant markdowns and these price cuts could temporarily pull inflation lower in certain categories over those months, particularly when there is heavy discounting.
“It will impact headline inflation in some way,” she pointed out.
But while widespread discounting could influence headline inflation to some extent, there were other bigger contributors to inflation unaffected by Black Friday.
“The RBA will generally look through these seasonal factors - it’s really what happens beyond those categories. I think that's more of concern for the Reserve Bank at the moment,” Ms Allen added.
“A lot of the inflation we saw in the third quarter were in items like new dwelling construction costs, council rates, eating and drinking out - they're generally not the categories that will be impacted by the spending around Black Friday-Cyber Monday.”
Ms Allen said consumer spending has been stronger and more resilient since the first interest rate cut in March, adding pressure to inflation - as seen in the September quarter.
She said if consumer spending continued stronger than expected, businesses could keep trying to pass on higher costs to customers, leading to more persistent inflation than the RBA has anticipated.
“That’s what impacts the interest rate outlook from here,” she said.
The RBA has slashed the official interest rate three times this year after keeping rates on hold at 4.35% since November 2023. The central bank next meets to decide on monetary policy on December 8–9.
CBA is expecting the RBA to hold the cash rate steady at 3.6%, with no further cuts in the near future. This is because the economy is operating close to capacity, and inflation is proving stickier and more persistent than earlier forecasts.
The RBA has cut interest rates three times this year. Picture: Getty
Meanwhile, the bank predicts headline inflation, currently around 3.2%, will rise to about 3.5% in coming quarters, partly due to energy rebates ending.
Ms Allen said while strong demand for household and other items is generally expected around Black Friday-Cyber Monday, it’s about “whether or not it's stronger or weaker than normal”.
“That's when it starts to potentially impact the outlook for the economy, and therefore the interest rate dynamic here in Australia,” she said.
Meanwhile, consumer sentiment has entered positive territory according to the Westpac Consumer Sentiment Index.
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The bank’s index surged 12.8% - the first positive read since early 2022.
“This is an extraordinary and somewhat surprising result,” said Westpac’s Head of Australian Macro-Forecasting, Matthew Hassan.
“Indeed, excluding the COVID disruptions in 2020 and 2021, this is the most positive result in seven years.”
The strong gain was recorded, despite a less confident outlook for interest rates and jobs.
“The real surprise, though, is how much these positives have outweighed renewed concerns about inflation and the outlook for interest rates.”
However, households with mortgages were an exception, with sentiment dipping 0.3% across this sub-group.
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