Aussie retailers upbeat about Christmas

(Australian Associated Press)


Australian retailers believe consumers will spend more on Christmas this year and many plan to start seasonal discounts in early December, according to a survey.

A third of retailers plan to begin discounting in early December, up from 27 per cent in 2015, Deloitte’s annual Christmas survey of retailers shows.

“It appears many retailers are prepared to sacrifice some margin early on to ensure they are not forced to heavily discount later in the festive period,” Deloitte’s national leader of retail and wholesale David White said.

Most retailers are upbeat in the lead-up to Christmas and 76 per cent expect shoppers to spend more than they did last year.

Nearly a third (28 per cent) anticipate sales growth of more than five per cent.

Mr White said low interest rates, a strong financial year for many retailers and strength in the key markets of NSW and Victoria were behind that confidence.

“It’s been a positive year for many overall and expectations for Christmas 2016 are good, with most retailers expecting growth in revenue and margins,” he said.

The majority of retailers (87 per cent) expect to at least be as profitable as the Christmas before, the survey found.

Nearly half of all respondents expect to see an increase, albeit modest, in their profit margins, while 13 per cent expect a fall, compared to 26 per cent in 2015.

Retailers are also positive about 2017, with 71 per cent planning to open more stores in the next 12 months – the highest percentage since the survey began five years ago.

Mr White said more new international entrants are expected in 2017 because of Australia’s strong economic conditions relative to other countries.

He said local retailers were better prepared and more skilled in taking on new competition compared to five years ago with many focused on controlling costs and efficiency.

Deloitte surveyed 52 executives and managers from leading retailers during September and October.


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