Retailers across Australia are expected to reap $21.5 billion in the 10-day lead up to Christmas, the National Retail Association said.
Interim CEO Lindsay Carroll said this is a 3.9% increase on the same period last year, and is expected across all sectors.
“Spending will largely be in-store as many of the online delivery cut-off dates have already passed,” Carroll said, “but this is great news for our bricks-and-mortar retailers, many of whom are still recovering from less foot traffic during the pandemic.”
Carroll noted that cost of living pressures have prompted consumers to approach their festive spending with caution.
“Due to rising inflation and interest rates, consumers kicked off their Christmas shopping earlier than previous years to spread the cost of their celebrations,” she said. “People have been shopping more often but with smaller purchases, so it’s no surprise retailers will be run off their feet in the final 10 days.”
The NRA forecast Australians will spend a total of $60.6 billion throughout the Christmas trade period, which encompasses half of November and all of December. This is down $3.3 billion from the Australian Retail Association’s prediction of $63.9 billion reported by Ragtrader in October, in conjunction with Roy Morgan and Salesforce.
ARA CEO Paul Zahra had said its forecasts pointed to upbeat trading conditions.
“Christmas is the most critical time of year on the retail calendar and given the financial pressure households are under at the moment, we know that many businesses were feeling nervous about a potential downturn in spending over the festive period," Zahra said.
"However, the good news is that consumers are set to continue opening their wallets in the face of cost-of-living pressures."
Zahra said that retail sales were currently running at records levels, with its then forecasts showing sales will remain strong for the remainder of the year.
“There’s a delayed lag associated with rising interest rates and inflationary pressures, so there will inevitably be a softening of sales, but it appears that won’t occur until next year.
“While businesses are combating record levels of labour shortages and supply chain constraints, there’s still plenty to be optimistic about this Christmas.”