Christmas is supposed to be the season of giving, and after dismal retail sales figures throughout 2019, amid a confluence of factors that include a slowing economy and a drawn-out federal election, it seems much of the sector is forecasting a happy ending to the year.
In its Retailers’ Christmas Survey 2019, which sought the views of executives from 56 prominent Australian retailers, sentiment is lower than the lead-up to last Christmas, but the majority still believe their sales this year will eclipse those of 2018.
Indeed, 62 per cent of these retail execs are forecasting higher sales this Christmas (down from 80 per cent last year) and the need to resort to discounting to achieve sales is expected from only a third (39 per cent).
“It’s clearly been a tough year for many retailers... So, it’s probably no surprise many are also approaching this Christmas with a little less cheer, certainly compared to last year,” said David White, national lead of Deloitte’s Retail, Wholesale and Distribution Group.
“Many have pinned their hopes on federal government tax cuts, but the latest trading data suggests consumers have chosen to keep any windfall in their pockets. Retailers are no doubt hoping they’ve been saving up for Christmas.”
According to Mr White, retailers are also cautiously optimistic of better trading conditions in the new year — albeit only a modest improvement.
“There are signs of more optimism among retailers for their prospects in 2020,” he said.
“[Retailers are] still hoping for the best, with some 72 per cent expecting to bounce back and grow their top line. But with most not forecasting growth in excess of 5 per cent, it still looks like another challenging year ahead.”
Concern sales frenzies actually damage retailers
According to Mr White, retailers are increasingly cautious of major sales events, fearing that rather than drumming up much-needed sales, they are actually conditioning shoppers to expect pre-Christmas bargains.
“With the proliferation of sales campaigns such as next week’s Black Friday leading into December, many are concerned this could bring forward Christmas trading at discounted prices.”
Separate data from Couriers Please suggests these fears may be well-founded.
Having polled 1,021 Australians who shop online, the courier service found that only a third of Australians have actually shopped during the Black Friday and Cyber Monday sales — which in 2019 fall on 29 November and 2 December, respectively.
However, more and more Aussies are likely to be tempted to splash cash at these sales, with 75 per cent believing the sales are getting bigger and better each year.
And, according to Couriers Please’s head of commercial and transformation, Jessica Ip, a quirk of the calendar will make them even more popular for Christmas shoppers.
“We expect that Black Friday and Cyber Monday will attract an even higher volume of sales this year, as the events take place a week later than in 2018. This will result in the events coinciding with the Christmas shopping period,” she said.
“We anticipate that astute shoppers will wait until these global events to save on their Christmas shopping.”
Ms Ip continued: “In the week following Black Friday and Cyber Monday from 2016 to 2017 to 2018, we have seen an 8–10 per cent increase in parcel delivery volumes. As these global shopping events gain more traction locally, with more retailers offering better discounts and products both online and in-store, we expect these sales will grow from strength to strength each year.”