Despite cost of living challenges, Australian consumers are ready to spend their hard earned money this Christmas with retail sales forecast to hit $60 billion.
According to the National Retail Association (NRA), Aussies will spend $60.6 billion in the pre- and post-Christmas sales period (14 November to 31 December), which is up 3.9 per cent on last year.
The association’s Consumer Sentiment Report shows shoppers are preparing for the bumper sales season by changing their spending behaviour to be able to afford special Christmas events and gifts, says NRA interim CEO, Lindsay Carroll.
“We found 71 per cent of Aussies are taking measures such as cutting back on day to day spending, seeking out discounts and offers or switching to cheaper brands to deal with increasing costs this season,” she explains.
“With inflation and interest rates yet to take full effect, almost half of consumers reported feeling confident and one in five plan to outspend last year.
“It’s clear people still want to feel special and have those great experiences but rather than indulging in costly goods and services, shoppers are planning ahead to score bargains in the upcoming sales events.”
Bargain sales events such as Cyber Monday are becoming major events on the retail calendar, providing consumers with the accessibility to research and purchase items anytime, anywhere.
“Even though Boxing Day remains the biggest sales event of the year, Black Friday and Cyber Monday are gaining momentum with 45 per cent of consumers likely to purchase or will definitely purchase items at these events.”
While ecommerce is definitely here to stay and evolve, 50 per cent of consumers reported that they prefer to spend in-store.
“Consumers still want those unique in-store retail experiences. They look for excellent customer service, with free delivery and returns, loyalty programs and friendly staff ranked as the most important retailer services among consumers,” she adds.
Retail sales have been performing quite strongly in the lead up to Christmas, with a 12.9 increase in October compared to the same time last year, according to the latest Mastercard SpendingPulse figures.
Retail categories such as jewellery (+41.1 per cent), apparel (+40 per cent) and home furnishings (+21.5 per cent) recorded significant year on year sales growth.
“This strong sales momentum bodes well for the most important retail trading period—Christmas—which we are forecasting will continue to deliver growth,” Australian Retailers Association (ARA) CEO, Paul Zahra.
“The ARA holiday sales predictions with Roy Morgan show Australians will spend nearly $64 billion in the lead up to Christmas, up three per cent on last year.”
“However, we acknowledge the challenge many small businesses continue to have as they contend with rising operating costs associated with fuel, energy, supply chains and rent. The Christmas trading period is particularly important for these businesses as they replenish their cash reserves in preparation for what is likely to be a challenging year ahead.”
