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Retailers optimistic for bumper trading

Alexandra Vanags
10 November 2021 1 minute readShare
Retailers optimistic for bumper trading

Eighty per cent of Australian retailers expect to see sales growth in 2021, and 90 per cent expect trading conditions to improve further over the next 12 months.

These numbers were released in Deloitte’s Retailers Christmas Survey 2021, which also found that 52 per of retailers expect sales to bounce back rapidly post lockdowns.

At the same time, 60 per cent say more than half of Christmas sales will be digitally enabled, and 42 per cent believe new product ranges and personalised marketing will be the most important tactic for winning over lockdown-fatigued customers.

Australian retailers have been on a rollercoaster since the onset of the pandemic, with demand supercharged in some areas and heavily impacted in others, said David White, Deloitte’s national leader, retail, wholesale and distribution. In this context, agility has been key, including building out online distribution networks and investing in logistics, e-commerce, analytics and CRMs.

“Digital offerings are likely here to stay, but Christmas has always been about the physical shopping experience and, as the vaccine-led reopening and recovery takes hold and retailers welcome cashed-up customers back to their stores, they finally feel they have something to be optimistic about,” Mr White said.

“Our respondents expect the store network to continue to be their main source of revenue, supported by click-and-collect and digitally-enabled in-store experiences.”

Still some challenges

Despite all the optimism, more than half of retailers are concerned about receiving sufficient stock for Christmas and 72 per cent called out shipping costs as having a material impact.

“Global supply chains have come under pressure as the world’s consumers emerge from the pandemic, and Australia is not immune from the fallout,” Mr White said.

“There is cautious optimism on this front, but still concerns about sufficient stock being available for peak Christmas trading."

Higher freight costs will continue to put pressure on margins, while many retailers are also concerned about skill shortages.

Look to the future

Going forward, half of respondents expect that it will take two years for CBD stores to return to pre-COVID levels of activity and a quarter say it will remain below pre-COVID indefinitely. Deloitte says retailers will need to monitor both this as well as increased demand in suburban centres.

“Getting on with business is the theme for the next 12 months, as retailers look to reconnect with their customers,” Mr White said.

“Clearly, the reopening of Australia both internally and internationally will be good for consumers and the economy. We will have more cash to spend, but we will also have more options for our discretionary spend, and some retailers may face headwinds as we refocus our attention to other activities and opportunities across the likes of travel and entertainment.”

Retailers optimistic for bumper trading
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Alexandra Vanags

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