Christmas sales tipped to rise slightly to $40 billion, as consumers shun sin spending to buy computers

Australia’s retailers are bracing for moderate sales growth during the peak Christmas selling season, with modelling from the Australian Retailers Association suggesting sales will hit $39.9 billion between mid-November and December 25, up just 3.5% from last year.

The ARA’s survey also suggests retailers are moving away from the traditional strategy of holding post-Christmas sales, with almost 63% of retailers saying they will hold pre-Christmas sales this year, offering discounts of to 30% on top of other promotions such as product giveaways and two-for-one deals.

“Retailers are usually optimistic in the lead up to Christmas but this year their spirits have been dampened with over 60% expecting trade over the Christmas period to be lower than last year,” ARA executive director Russell Zimmerman says.

“This year has been tough for retailers with consumers still suffering from a post-GFC hangover and being very careful about opening their purses and spending on particular items especially clothing, footwear and bigger ticket household items.”

Christmas sales in NSW are tipped to come in at $13.1 billion, while Victorian retailers will take in about $9.7 billion and Queensland shop keepers will sell $8.2 billion worth of goods.

In South Australia, retailers are expected to take $2.7 billion, Western Australian retail sales are tipped at $4.2 billion and Tasmania sales at $823 million. Sales in the Northern Territory are tipped to be $401 million, while sales in the ACT are tipped at $746 million.

Brian Walker of retail consultancy The Retail Doctor, says retailers need to stay positive and ensure they are well positioned to take advantage of the Christmas rush.

“They need to make sure they have good product knowledge, that they are maximising the sale opportunity without being pushy, that they have good range and that they have staff to cover demand,” he says.

“They need to make sure the windows are fresh, that they are changing them regularly and so on. They also need to have great promotional and marketing campaigns… but to be honest, if it’s not right by now, they’re going to struggle.”

However, analysis by economist Craig James of CommSec has provided some fresh insight into exactly what Australians might be spending up big on over the holiday season.

James’ analysis, of unpublished Australian Bureau of Statistics data, shows Australian spending habits have changed markedly over the last 12 months.

“Aussie consumers are making fewer trips in the car but travelling more on planes and trains. And while we are spending more on little luxuries like shoes, sheets, pillows and sporting goods, we are cutting back on the so-called ‘sinful’ pleasures of gambling, alcohol and cigarettes. Welcome to New Australia,” James says.

The biggest jump in spending was on computers, were spending leapt 40.3% over the last 12 months.

Curiously though, spending on telecommunications items such as mobile phones and internet fell 3.1% in a year when the smartphone market was flooded with hot new products.

James says the record fall in telecommunications “is of concern to the government given the push for the National Broadband Network”.

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