ABS Retail Trade figures released showing 1.4 per cent growth in sales, compared with a rise of 0.4 per cent the previous month, was the first official sign of a strong Christmas very early on in the season.
The Australian Retailers Association (ARA) executive director Russell Zimmerman said November retail sales were up 7.3 per cent on the year before which was a confident sign Christmas sales would reach projections of $38.7 billion.
"ARA projections record Christmas turnover from sales in the last two weeks of November through to Christmas Eve,” he said.
“Most shoppers leave their Christmas shopping to the last week before Christmas, so to see such strong growth early on in the season is a good sign for retailers.”
Clothing, footwear and accessories had the strongest growth (2.5 per cent) but sales rose across all categories, including household goods (1.7 per cent), food and grocery retailing (1.6 per cent), department stores (1.1 per cent), cafes, restaurants and takeaways (1.1 per cent) and other retailing (0.2 per cent).
All states recorded growth in retail sales for November apart from Tasmania which remained unchanged. South Australia (3.1 per cent) had strongest growth, followed by the Australian Capital Territory (2.7 per cent), Victoria (2.1 per cent), New South Wales (1.3 per cent), Western Australia (0.7 per cent), Queensland (0.6 per cent) and the Northern Territory (0.5 per cent).
Retailers have reported softer trade during the first few weeks in December and then surges in consumer spend the week before Christmas and during the first week of post-Christmas sales.
In the week before Christmas, 62 per cent of retailers reported trading to be the same or better when compared to the same time in 2008 and this growth has followed through to the first week of post-Christmas sales.
"When December trade figures are released next month we’ll have a clear picture of how retailers have fared for Christmas from 2009 but so far it’s looking like a merry one," said Zimmerman.
However, National Retailers Association (ANRA) CEO Margy Osmond said it is too early to tell.
“The retail numbers are still volatile, the ABS is readjusting the way it produces seasonal estimates and has revised both the October and September numbers upwards. It’s too early to suggest a spending recovery based on the November figures," she said.
“Up until now we’ve seen confidence lift and yet spending has remained patchy. This result indicates the sector entered the Christmas period with the engine revving and potentially gathering momentum.
“However, it’s clear that the full impact of the two rate rises is only partially captured in these numbers. There is a lag effect; it can take several months for the impact to filter through to shoppers’ purses and pockets,” said Osmond. 
Results on a sector by sector basis have been patchy and shopper habits and behaviours are going against the trends of only a few years ago.
“Shoppers have been hungry for bargains and this has certainly pumped up the competition between retailers. The strong Australian dollar has helped retailers cut prices on imported items like flat screen TVs and gaming consoles. Australians appear to have put off purchasing major household furniture such as beds and bedroom furniture until the New Year and this sector appears to be doing well in the January sale period.”
ANRA warned that 2010 is still going to be a challenging year for retailers.
“Last year interest rates were low and many people received cash handouts which lifted retail spending. This year we are facing strong headwinds driven by the potential for more interest rate hikes and a lingering uncertainty about the global economy and its impact on jobs here at home,” said Osmond.
Access Economics expects retail sales will stay subdued until the end of 2010. Retail sales are expected to grow by just 2.1 per cent in 2009-10 (inflation adjusted) before dipping to 1.4 per cent in 2010-11.