Retail industry cautiously optimistic for a cracker Christmas

PEAK retail industry body the Australian Retailers Association (ARA) said retailers are hopeful that the upcoming Christmas trading period will be better than last year with three quarters of retailers (75%) expecting a small yet solid growth in Christmas sales.

According to the latest Deloitte Retail Review survey, there appears to be genuine optimism about Christmas trading regardless of retailers expectations that sales growth isn’t likely to exceed a modest 5 percent.

ARA Executive Director Russell Zimmerman said it wasn’t surprising that two out of three respondents believe Christmas trading is a “critical’ or “very important” trading period.

“For some retailers, Christmas trade can make up to 60 percent of yearly sales – meaning the festive season is an extremely important time for retailers to make up for what has been a tough year in business.

“This time last year the ARA and research partner Roy Morgan Research released an official pre-Christmas sales forecast of $42.2 billion expected to go through retail tills from mid-November 2013 to 25 December 2013. This figure was later confirmed at an actual pre-Christmas spend of $43 billion.

“The ARA’s forecast was almost bang on – and we are expecting our pre-Christmas figures for the 2014 trading period to be even higher. We will be releasing our official pre-Christmas figures next week.

“The Deloitte Retail Review survey provides some interesting information around expectations for online growth which continues to be greater than overall retail sales. The majority of retailers with an online presence are predicting Christmas growth of between 1 percent and 10 percent, which possibly reflects a maturing of the level of online retailing compared to a few years ago.

“It’s great to see that 83 percent of retailers are predicting higher online sales than last Christmas and over half (51%) of these are expecting 10 percent growth in digital sales. 

“Disappointingly, however, the survey revealed that retailers believe they will need to cut margins by discounting this Christmas. The good news though is that 49 percent of respondents said that they expect modest increases in margins, meaning retailers might not need to discount as much as they have done in previous years. It’s certainly a positive sign that the ‘slash and burn’ style discounting around Christmas is less likely this year as retailers fight to protect margins,” Mr Zimmerman said.

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Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $265 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia.

Visit www.retail.org.au or call 1300 368 041.

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