The Australian Retailers Association is expecting "unspectacular" trading as Christmas spending season approaches.
The Executive Director of the Australian Retailers Association, Russell Zimmerman, said ARA/Roy Morgan forecasts for pre-Christmas retail trade offered some cheer for a sector that has struggled in 2019, but acknowledged this came as much of Australia faced risks of natural disaster and a bleak Christmas indeed.
Speaking at the release of annual joint ARA/Roy Morgan pre-Christmas predictions for 2019 – covering November 12 to December 24 – Zimmerman said Australians will spend almost $53billion before Christmas, but emphasised this was predicated on the regions “getting lucky” by avoiding bushfires or other natural disasters.
“We live in the best country on Earth, but that comes with some terrible drawbacks; one of those is summer disasters – fires, cyclones, floods – that sadly afflict some parts of the country,” Zimmerman said.
"The ARA is expecting a solid if unspectacular retail trade as Christmas approaches.”
His verdict follows the retail sector recently recording its slowest annual growth rate since the 1990-1991 recession.
Roy Morgan said a bright spot for Christmas spending was hospitality, with businesses forecast to grow by 2.3% to an expenditure of well over $7.4 billion.
Meanwhile, the category combining ‘Other retailing’ which includes online retailing is predicted to experience the fastest growth of all, with Christmas spending up by 3.7% to over $7.6 billion.
“While the headline figure is down on 2018, it’s better than we’ve seen in recent months,” Zimmerman said. “Sales of food are tipped to be very strong, at over $21billion; whether it’s a cold seafood buffet or a roast turkey with the trimmings, Australians love their Christmas lunch or dinner, and these figures show 2019 will be no different,” Zimmerman said.
Across the states and territories, Queensland (3.6%) and Victoria (3.0%) led predicted pre-Christmas retail sales growth, which Zimmerman said mirrored trading trends seen throughout the year in official ABS retail sales data.
Zimmerman said the ARA was deeply sensitive to the threat of bushfires faced across Queensland and NSW at the time the predictions for pre-Christmas trade were released, and said the Association’s thoughts and prayers for a safe, secure and happy summer season and Christmas were with those people in affected areas.
“Thousands of our members – their families, their employees, their communities – are located outside major cities and in areas threatened by disasters like this, so we know many of them and feel for them all,” Zimmerman said.
“The best Christmas present they could get is to avoid these disasters altogether – today it’s a fire risk – that unfortunately are part and parcel of living in this wonderful but drought-ravaged and fire-prone country,” he added. We wish all retailers a very Merry Christmas, and all Australians, a wonderful time with their families and friends.”
Aussies planning to drink less this Christmas
New findings from St George Bank also suggest Australian households are slamming the brakes on Christmas gift giving this year with almost one in two Aussies (43%) setting spending limits on gifts to family and friends, and almost a third (31%) planning to give fewer gifts this year.
The St George Christmas Spending Report found one in five people also said they would be skipping Christmas parties to save money during the festive season.
In an effort to curb overspending during the holiday season, many Australians have devised plans to cut back on their holiday expenditure. Popular measures include holing up at home (29%), putting on simpler and thriftier Christmas lunches (29%), and easing up on the alcohol (20%).
St George Bank general manager Ross Miller told News Corp that partygoers might notice less people kicking their heels up in December.
“If you turn up to a party and there’s a few less people there’s a one in five chance they’ve actually chosen not to be at the party because they have looked at their overall spending,” he said.
The report found 21% considered alcohol the biggest waste of money at Christmas followed by decorations (18%).
NRA bullish on Christmas sales
The National Retail Association (NRA) has unveiled its Christmas sales forecasts, revealing it is confident that shoppers will splurge more than $50,000 per minute in online purchases as part of a $50 billion spend across all retail.
NRA CEO Dominique Lamb said that a large portion of successful modern retailers are utilising both in-store and digital avenues to maximise revenue.
“Last week kicked off the official Christmas and Boxing Day trade period and it’s set to be another blockbuster holiday season with shoppers reaching for their wallets to stock up on presents, fresh food and paraphernalia,” Lamb said.
“The NRA is forecasting another record spend this Christmas, with breakthrough sales across both bricks & mortal and online retail.
“Shoppers are set to splurge an average of $54,347 per minute in online sales alone, with digital events such as Cyber Monday enticing Aussies with bargain prices. The total digital spend will reach $3.6 billion over the six weeks.
“But there will also still be plenty of action in traditional, physical stores with total retail spend forecast to easily surpass the $50 billion barrier. Consumers will again stampede shopping centres in the lead up to Christmas, and Boxing Day will remain another signature event on the industry calendar.
“We anticipate that this holiday season will see businesses who offer a unique in-store experience, coupled with a savvy online sales avenue, to be the ones who really break new ground.”
Each state and territory is forecast to record an increased spend on 2018 figures, with an increase of 3% nationwide. Lamb also noted that new trends in modern retail are seeing businesses being forced to keep pace with changing customer behaviour.
“It’s a vital time of year for retailers across the nation. A bumper Christmas harvest not only has a positive impact on the bottom-line, it can also help sustain many smaller operators during quieter periods,” Lamb said.
“In 2019, shoppers can research and purchase items from the comfort of their own home via everyday accessories such as laptops, iPads and iPhones. Changes in consumer behaviour have led to new phenomena during the Christmas period such as Black Friday and Cyber Monday.
“Customers are now placing a greater emphasis on their experience at the shops, and not only traditional factors such as quality and price. Those who are thriving in modern retail offer interactive services that engage shoppers in new and exciting ways.”
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