With just a month to go until Christmas, the Australian retail sector is celebrating an uptick in sales and improved consumer optimism, with several key reports indicating the festive season may indeed be merry and bright for retailers.
So, let’s round up the latest news and predictions for the Christmas retail period that’s currently under way.
Christmas retail sales set to grow – ARA and Roy Morgan
Roy Morgan and the Australian Retailers Association (ARA) have again teamed up to predict Christmas sales over the season ahead.
This year they’re forecasting $53.4 billion will be spent nationally from November to late December.
That’s an increase of 2.8 per cent compared to 2019, when $52.9 billion was spent during the same period, and is music to retailer’s ears, considering the challenges 2020 has delivered.
“Retail sales growth of 2.8 per cent year-on-year would be an incredible achievement given the barriers that retailers have bravely faced throughout 2020 – though there continue to be clear winners and losers within the retail categories,” ARA CEO Paul Zahra said.
“As Australians carry the ‘stay, play and work at home’ theme into the rest of the year, it’s no surprise to see a strong performance predicted in the Food and Household Goods categories. Hospitality remains inhibited by capacity constraints and discretionary spend is likely to remain lower across the Clothing, Footwear, and Accessories and Department Store categories.
“We anticipate some variation between the states and territories, and it’s been a year of up and downs, so these predictions carry a bit more uncertainty than last year – but also a lot more potential upside if we work together to create a healthy, safe summer,” he added.
Among the expected winners are Queensland, Western Australia, South Australian, and Tasmania, with most of these states anticipated to enjoy double-digit growth.
New South Wales and Victoria, which are the states where the greatest COVID-19 impact has been felt, are predicted to see a small decline in sales totals.
Retailers optimistic – Deloitte
A Deloitte report also paints a cautiously optimistic picture, with the Retailers’ Christmas Survey 2020 noting the percentage of retailers expecting more than 5 per cent growth in 2020 has nearly doubled since last year.
That said, Deloitte notes there is a story of polarisation behind these figures. While 39 per cent of retailers expect Christmas sales to exceed 2019 by more than 5 per cent, at the other end of the spectrum 24 per cent expect sales to decline by more than 5 per cent.
One certainty highlighted in their report is that online retail will have a critical role to play – 71 per cent of retailers expect online sales during Christmas to exceed the same period last year.
However, Deloitte also notes instore retail continues to be the main game.
“It is clear the shift to online and digital has been accelerated due to the pandemic, and we can expect this shift to last beyond Christmas,” Deloitte spokesperson, David White said.
“But looking at consumers’ intended shopping channel, instore remains the priority destination, representing an opportunity for retailers to remind consumers that one of the joys of Christmas can be shopping.
“Over 68 per cent of retailers have identified ‘digital and omni’ and ‘customer engagement and experience’ as strategic priorities in the weeks leading up to Christmas.”
Meanwhile, Deloitte notes Australian consumers have greater confidence about shopping in-store relative to other countries.
Deloitte’s State of the Consumer Tracker, found 72 per cent of Australian consumers feel confident about going to a store, compared to 61 per cent in the US and 55 per cent in the UK.
October sales figures rise – ABS
As the Christmas sales period ramps up, good news has also emerged about recent sales data. Australian Bureau of Statistics (ABS) monthly data indicates October sales figures were 1.6 per cent above September’s and 7.3 per cent above the year prior.
“Growth in Victoria led the way at 5.2 per cent for the month, though the state itself remains 5.7 per cent below 2019 levels,” Inside Retail notes.