Shoppers tightened their purse strings in December after easing restrictions and online sales events encouraged them to spend big the month before.

Preliminary retail figures released by the Australian Bureau of Statistics shows turnover in December was up 9.4 per cent year on year but down 4.2 per cent over the month.

The monthly fall was larger than market expectations but aligns with the recent shift towards doing most of our Christmas shopping in November rather than December.

The trend was accentuated this year as December sales were also weighed down by localised lockdowns in Sydney and an exhaustion of pent-up demand in Victoria, which in November reported a 22.4 per cent lift in turnover as restrictions eased.

National turnover in November rose by 7.1 per cent.

ABS director of quarterly economy wide surveys Ben James said five out of the six retail industries reported falls in turnover in December, with cafes, restaurants and takeaway food services the only industry reporting a rise.

All states and territories except the Northern Territory saw declines, which were largest in Victoria (-7 per cent) and New South Wales (-5 per cent).

“Household goods retailing, other retailing, department stores, and clothing, footwear and personal accessory retailing, fell after large rises in November,” Mr James said.

“November sales were underpinned by an easing of restrictions in Victoria, new product releases and Black Friday sales.”

New product releases and online sales encouraged consumers to bring forward their spending to November.

Australian Retailers Association CEO and former David Jones boss Paul Zahra said the sales figures were incredible given the country wrestled with fresh outbreaks and border closures in December.

“We knew Christmas this year would be a challenge, given the threat of the virus, so it’s fantastic to see a year-on-year increase of 9.4 per cent,” Mr Zahra said.

This is a fantastic result that’s allowed retailers to recoup some of the losses they incurred during the worst of the COVID lockdowns and restrictions in 2020, and it sets them up for a more prosperous 2021.”

Meanwhile, Commonwealth Bank senior economist Kristina Clifton said the monthly fall was to be expected given it came after a 7.1 per cent rise in November and captured the impacts of the lockdowns and restrictions in Sydney.

She said the pandemic had given a major boost to many parts of the retail sector by shifting spending from services to goods.

And although state border closures and restrictions in Sydney and Brisbane have weighed on consumer spending in the early part of 2021, Ms Clifton expects “spending growth to pick up now that restrictions have been lifted”.

“We expect a strong rebound in the economy in 2021 including a good recovery in household consumption,” she wrote in a research note.

“Households have accrued a large stock of savings over the coronavirus pandemic thanks to a large amount of government support, interest rate cuts and less opportunities to spend during periods of restrictions.

“These savings will support household consumption through 2021, [and] an improving labour market is also another positive for the spending outlook.”