Preliminary ABS retail trade figures for October, showing a 7.3% year-on-year increase, looks positive for retail leading into Christmas.
However, Australian Retailers Association CEO Paul Zahra expects some retail categories and locations will continue to fare better than others.
“The monthly elevation of discretionary categories was heartening with these areas most negatively affected by pandemic spending patterns across 2020. Our eyes are firmly on the Christmas trading period, as we hope for a release of pent-up demand,” he said.
Sales performance is likely to be polarised with 39% of retailers expecting Christmas sales to exceed 2019 by more than 5%, while 24% expect sales to decline by more than 5%, according to a Deloitte Retailers’ Christmas Survey.
“The big shift towards online continues, with 71% of retailers surveyed by Deloitte identifying that online sales are expected to exceed the same period last year. With convenient new options like click-and-collect, and better home deliveries this Christmas, customers will be spoiled by options in how they shop,” he said.
“Unsurprisingly, Victoria continued to drag down the national average, falling 5.7% year-on-year after a hard lockdown spanning most of October, though a monthly increase was a promising sign of a return to spending upon reopening.”
National Retail Association deputy CEO, Lindsay Carroll agreed that the preliminary October results give cause for optimism as retail heads into Christmas.
“Victorian retailers reopening at the end of the month has helped to provide a boost in overall turnover for the month of October,” Carroll said. “While ABS retail sales for October are well up on the corresponding month last year, we are still operating in challenging times and there’s no room for complacency. The continuation of government assistance measures and Australians being unable to travel overseas does mean that consumers currently have a healthy level of discretionary spending power.”
Carroll said it was critical that retail remained strong between now and Christmas. “A bumper festive season will mark the start of a retail recovery,” she said.
The NRA is forecasting $52.4 billion nationwide will be spent over the Christmas period.