Retail sales eased by 4.2 per cent from November to December, falling after a big spend-up when Melburnians emerged from their prolonged COVID-19 lockdown.
Australian Bureau of Statistics' preliminary retail trade figures for December showed spending dropped $1.33 billion over the month.
Spending surged 7.1 per cent to a record $31.7 billion in the previous month after Melbourne COVID-19 restrictions were eased.
The ABS release is based on preliminary data provided by businesses that make up about 80 per cent of total turnover, with the final figures released on February 5.
Capital Economics' Ben Udy said the bigger-than-expected decline was most pronounced in Victoria and NSW, down five per cent and seven per cent respectively.
"The decline in Victoria may be due to pent up demand fading after the Victorian economy reopened in November," Mr Udy said.
"The lockdown in some parts of Sydney clearly prevented some households from shopping as normal."
The relaxing of restrictions in most states was expected to drive a shift towards services consumption and away from goods consumption, he said.
The figures come a day after the release of buoyant employment figures.
The unemployment rate dropped to an eight-month low of 6.6 per cent in December from 6.8 per cent in November, a further retreat after spiking to 7.5 per cent last July during the depths of the recession.
A further 50,000 people secured work in December, which means 90 per cent of jobs lost between March and May last year as a result of the pandemic have now been restored.
Prime Minister Scott Morrison said the jobs figures showed cooperation between governments was not only saving lives but also livelihoods.
Australian Associated Press