Little joy as shoppers hunt for bargains

THERE has been no Christmas miracle for Australia's embattled retail sector, with the traditional shopping season doing little to shift downbeat forecasts for the year ahead.

THERE has been no Christmas miracle for Australia's embattled retail sector, with the traditional shopping season doing little to shift downbeat forecasts for the year ahead.

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.

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