Retail bodies remain confident of Christmas sales predictions despite November results
Market analysts may be in for a shock over the coming months, with the latest results from the Australian Bureau of Statistics (ABS) suggesting retail trade leading up to Christmas failed to meet expectations.
The November trade figures indicated a sluggish preview for Christmas trade, reporting 2.76 per cent total year-on-year growth, down on projections from the Australian Retailers Association (ARA).
Russell Zimmerman, executive director of the ARA said that while the figures failed to live up to initial expectations, the ARA was confident the retail sector would achieve the $51bn pre-Christmas sales figure.
“Our combined research with Roy Morgan forecasted a 2.9 per cent increase in pre-Christmas sales, as we projected shoppers to spend $51bn from retail stores across the country from November 9 to December 26, 2018,” Zimmerman said.
“Sales events in the month of November certainly contributed to a steady lead-in to the festive season, particularly for department stores and online retailing.”
According to the report, department stores posted 1.63 per cent year-on-year growth, however, the other retailing/online category produced a weaker than expected result at 4.68 per cent year-on-year.
Lindsay Carroll, deputy CEO of the National Retail Association (NRA) said that online results demonstrated there was still a strong consumer demand for bricks and mortar retailing.
“Retail turnover from online sales continues to increase at a high rate and this can be attributed to the rise in popularity of events such as Click Frenzy and Cyber Monday, combined with the fact that buying online is a convenient option for many shoppers,” Carroll said.
“Although online sales are increasing at a steady rate, we certainly don’t think it the end of bricks and mortar retail. Online turnover still only accounts for less than 9 per cent of total retail sales and many retailers offer an online channel that complements their physical store.”
On a broader scale, the statistics reported an increase in retail turnover of 0.4 per cent, seasonally adjusted, which Carroll said was welcome return to confidence.
“The ABS figures indicate a strong sales performance for retail in November and aligns with the NRA forecast of a $50 billion spend for the Christmas trade period,” Carroll said.
“While retail has certainly had busier years than 2018, the November figures bode well for Christmas sales and we anticipate even stronger figures for the month of December.”
Source: Australian Bureau of Statisics