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Business confidence continues to rise

Keeli Cambourne
09 November 2021 2 minute readShare
Business confidence continues to rise

Australian retailers are highly optimistic and looking forward to bumper trading conditions in the lead up to the all-important 2021 Christmas period.

Deloitte’s Retailers Christmas Survey 2021 said 80 per cent of retailers expect to see sales growth in 2021, up 20 percentage points from 2020.

The report also stated that 52 per cent of business expect sales to bounce back rapidly post lockdowns and 42 per cent believe new product ranges and personalised marketing will be the most important focus areas to boost sales.

However, more than half (55 per cent) say they are concerned (and 26 per cent very concerned) about receiving sufficient stock for Christmas and 72 per cent highlight shipping costs as having a material impact on their input costs.

 “Australian retail has been on a genuine rollercoaster ride since the onset of COVID-19, with supercharged demand in some market segments and others heavily impacted by lockdowns and changes in consumer habits,” Deloitte’s national leader, retail, wholesale and distribution group, David White, said.

“Agility became key, and many pivoted quickly by building out online distribution networks and investing in logistics, ecommerce, analytics and CRM to tide them over.

“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.

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

“And, with customers fatigued by months of lockdown when they step out and into stores, retailers offering new product ranges, personalised marketing, seamless experiences across all channels, and anything ‘new and different’, are most likely to be the winners this holiday season.”

However, the survey also noted there were some challenges ahead especially in the global supply chain.

“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. And while consumer demand is expected to be strong, higher freight costs and the ongoing requirements to ensure COVID-safe retail environments means there will be ongoing pressures on margins. Skills shortages, particularly in digital and supply chain, are also on the minds of many.” 

Despite the confidence, more than half the survey respondents said they did not see CBD shopping to return to pre-COVID levels for at least another two years.

“Based on future of work trends, and working from home in particular, nearly half of survey respondents expect it to take two years for CBD stores to return to their pre-COVID levels of activity, while a further 26 per cent expect activity levels to remain below pre-COVID indefinitely,” Mr White said. 

“Retailers will need to closely monitor this area, as well as increased demand in suburban centres, and be ready to take advantage of the rebound when it happens. And they will ideally do so in partnership with their landlords. Broader success for the sector will certainly be determined by collaborative efforts between lessors and lessees.”

Business confidence continues to rise
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Keeli Cambourne

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