Little joy as shoppers hunt for bargains
Retailers reported good, but not great, Christmas sales as thrifty consumers looked for bargains both online and in store.
"I think it's going to continue to be gloomy for at least the first half of the year," said Margy Osmond, the chief executive of the body representing big retailers, the Australian National Retail Association.
"We're going to see more impact in the discretionary spend areas from online," she said. "I hate to say it but I think we're going to see some more reasonably high-profile failures."
She said sales growth in the Christmas period would "probably sit at around 4 per cent".
"While that sounds OK, it's not really, because decent growth is 6 per cent and we haven't seen that for a very long time," she said.
According to the ANRA's annual survey of shoppers, conducted in the lead-up to the Christmas rush, 59.4 per cent of consumers planned to pay for their purchases using cash. This is up slightly from 58.7 per cent last year.
"It all fits the mindset of a very conservative consumer - that they're not interested in a huge amount of debt," Ms Osmond said.
Russell Zimmerman, the executive director of the Australian Retailers Association, which represents smaller retailers, said solid trade during Boxing Day sales did not represent a reversal of the weak consumer confidence that has plagued retailers this year.
"I think it's more about the fact that they've got an opportunity to get goods at a very discounted price," he said.
"Someone said to me in the lead-in that they've had a good Christmas, but not a great Christmas. I think that sums it up. I think that's how we are going to go into next year, remembering that some stage next year we are going to have an election, and elections always slow retail down."
Myer reported record sales of gift cards and Ms Osmond said booming sales of the cards reflected the conservative mindset of consumers.
"What a gift card is perceived as is the ultimate in value because whatever you pay for it when you buy it, it will be worth more than that in post-Christmas sales," she said.
Many retailers used their online stores to move Boxing Day sales forward, with some starting to discount as early as Christmas Eve.
Ms Osmond said retailers were reporting a "huge" Christmas online.
The ANRA was expecting $1.8 billion to be spent on Boxing Day, with total spending tipped to hit $5.7 billion after the first week of sales.
A Myer spokesman would not reveal sales or traffic figures from the Boxing Day rush, but said the company was expecting similar visitor numbers for the day to last year.
"We are expecting around 1.5 million customers to visit the stores throughout the country," he said.
"This is in line with last year, and we have noticed an increase in people lining up to get into the stores."
Despite heavy markdowns in the lead up to Christmas, the retailer said it was still offering additional discounts on certain items on Boxing Day.
"There are genuine savings to be had," the spokesman said.
Mr Zimmerman said he believed lower interest rates and gift vouchers, which sold well in the lead-up to Christmas, were driving some of the buying.
Menswear was "trading a bit better than in the past few years", as was footwear, he added.
Frequently Asked Questions about this Article…
Retailers reported Christmas sales were good but not great — shoppers hunted bargains both online and in store. The Australian National Retail Association (ANRA) said sales growth would probably sit around 4% (below the 6% typically considered ‘decent’), signalling a muted recovery that everyday investors should watch when assessing retail sector earnings and guidance.
The outlook is cautious: Margy Osmond of the ANRA warned it could remain gloomy for at least the first half of the year. She expects further pressure on discretionary spending from online competition and said there may be some reasonably high‑profile business failures — a key risk for investors focused on retail stocks.
ANRA’s annual survey found 59.4% of consumers planned to pay with cash, up from 58.7% last year. That shift toward cash and away from debt reflects a conservative consumer mindset, which can constrain retailers’ margins and sales growth — important context for investors evaluating consumer demand.
Yes. Myer reported record gift card sales and ANRA noted booming gift card activity. Gift cards were popular because shoppers viewed them as a safe, value-driven purchase that often translates into spending during post-Christmas sales — a trend investors can track as a sign of cautious but active consumer behaviour.
Many retailers used online stores to move Boxing Day sales earlier, with some starting discounts as early as Christmas Eve. Retailers reported a ‘huge’ online Christmas, indicating that e‑commerce promotions and timing are now a major driver of holiday revenue — a strategic area for investors to monitor.
The ANRA was expecting about $1.8 billion to be spent on Boxing Day, with total spending tipped to reach $5.7 billion after the first week of sales. These headline figures help investors gauge the scale of holiday trading and its contribution to quarterly retail results.
A Myer spokesman said the company expected around 1.5 million customers to visit stores nationwide on Boxing Day, roughly in line with last year, and noted increased lines to enter stores. Although there were heavy pre-Christmas markdowns, Myer still offered additional Boxing Day discounts on certain items, which may affect margin outcomes that investors watch.
Russell Zimmerman of the Australian Retailers Association said lower interest rates and the strong sale of gift vouchers were driving some purchases. He also noted menswear and footwear were trading a bit better than recent years. Investors should consider how interest rate moves and gift‑voucher flows can temporarily boost retail categories even when overall confidence is weak.
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