Retailers pray for Christmas rush

RETAIL bosses hope that a Christmas Eve rush will deliver the struggling sector some joy after a holiday season that has so far been flat at best.

RETAIL bosses hope that a Christmas Eve rush will deliver the struggling sector some joy after a holiday season that has so far been flat at best.

Myer chief executive Bernie Brookes said sales so far were in line with his prediction of a flat Christmas, while Harvey Norman executive chairman Gerry Harvey said it would be "bloody fantastic" if sales reached last year's levels.

"It's certainly been a very late Christmas," Mr Brookes said. "Every year gets later and later as people get busier and busier.

"We've seen pretty much as we expected ... the whole year for us has been reasonably flat and we expect Christmas to be flat. There's still a couple of days to go and we're certainly in line with our expectations."

The Australian National Retailers Association is predicting shoppers will spend $2 billion in a last-minute Christmas Eve spendathon caused in part by Christmas falling on a weekday this year rather than on a weekend, as it did in 2011 and 2010.

Over the past two years, Australia's shopping strips have been battered by a series of retail collapses, including Retail Adventures, Colorado, Redgroup and Fletcher Jones, while survivors have had their profits crunched as gloomy consumers slashed spending and turned to the internet.

Mr Brookes said consumer concerns about the economy meant it was "never going to be a bumper Christmas".

"That means we got our share, and when I go into shopping centres I think we're doing as good as or better than other retailers.

Mr Harvey said Harvey Norman stores were having a late surge. "We've had a pretty bloody bad time all year," he said.

"It's been a long time since we've had a month that has been up on last year.

"There's a chance we could be up on last year, which would be nice, but we won't know that until the end of the month.

"We're right in all the product categories - furniture, bedding, carpets, everything's going OK ... it's just TVs and computers dragging us down.

"We've been particularly hard hit in the last year or two through TVs coming down so much in price and also computers coming down so much in price, because that's our big product categories.

"For a retailer like us, that's just been bloody devastating, so if you can get last year's figures with all that happening, it means you're getting more things sold and what you're losing in that category you're picking up in the other categories.

"If we can get to the same figures as last year, that's bloody fantastic."

Mr Brookes, who was been calling on the Reserve Bank to cut official interest rates for months, said the benefit of a cut in rates earlier this month to 3 per cent had yet to flow through to household balance sheets.

"What it probably did was lift a little bit of consumer confidence coming into Christmas," he said.

Record gift card sales meant Myer was expecting "a good stocktake sale". "It's probably the most competitive stocktake sale we've run for years. We've got a lot of 60 per cent off; we're going to hit the ground with a real force on Boxing Day," he said.

"We're confident that the consumer has got a lot of gift cards, looking for a bargain, they've been holding off in areas such as homewares and we've got some very, very competitive deals."

Mr Harvey had a gloomier view of the future.

"January to June next year, there's no reason to be optimistic," he said. "The only thing we can hope is that there's another couple of rate cuts, which is certainly on the cards.

"What you've got to bear in mind is that they've got these low interest rates, nought to 1 per cent, in other parts of the world, and their economies are still not improving."

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles