The final shopping week before Christmas is set to be a busy one for retailers, with Aussies spending a whopping $9 billion on gifts.
Despite the cost-of-living crisis, the pre-Christmas re-forecast by the Australian Retailers Association (ARA), in conjunction with Roy Morgan, is slightly up on last year, reaching $67.4 billion (up one per cent) for the November to 24 December trading period.
ARA CEO, Paul Zahra, says retailers had built momentum during the successful Black Friday sales.
“November trading by all accounts appears to have been strong, despite cost-of-living pressures, as shoppers capitalised on unprecedented deals and sales to tick off their Christmas lists early and this has helped prop up our pre-Christmas projections somewhat,” he explains.
“The slight increase in spending this year is being inflated by unavoidable supply chain price increases, particularly in food, and an overall increase in Australia’s population. If you exclude these factors, overall Christmas spending is in decline.
“This makes for a competitive last week before Christmas amongst retailers, as traders compete for a smaller pool of discretionary spend.
“For most discretionary retailers, up to two-thirds of their profit is made during the all-important Christmas trading period, so December remains a period of uncertainty. This holiday period can be a make-or-break for many discretionary retailers.”
The last week of shopping will be mostly an in-store experience with delivery deadlines closing in.
“Once the delivery deadline has passed, shoppers will have no choice but to head in-store to finalise their Christmas gifting lists with e-gift cards remaining a favourite last-minute choice.”
Indeed, according to research by experience management provider, Qualtrics, shopping in store leads to greater satisfaction―over half (55 per cent) say they feel satisfied with the in-store customer service experience during the Christmas shopping period.
The ease of browsing products (15.2 per cent), discounts and incentives (15 per cent) and a better customer experience (14 per cent), are key drawcards for those planning to shop more in store.
The categories of household goods (down three per cent) and hospitality (down 1.5 per cent) are forecasted for a continued softening of spending in the lead up to Christmas as cost-of-living pressures continue to hold.
Department stores are projected to lead spending growth (up three per cent) followed by other retailing, which includes categories such as recreational goods, books, cosmetics (up 1.6 per cent) and clothing (up 0.6 per cent).
