Retailers are set to rein in $9 billion in sales in a festive final week before Christmas, with shoppers urged to wrap up their online gift shopping as Australia Post’s delivery deadline for Christmas nears.
Australia Post parcels should be sent by today, Monday, December 18 for standard post to reach most destinations within Australia before Christmas. If sending via Express Post, the cut-off date is December 21. People sending to or from Western Australia have until December 20 for Express Post to ensure their gifts are delivered on time, with standard post cut-off for WA already past.
The pre-Christmas re-forecast by the Australian Retailers Association (ARA), in conjunction with Roy Morgan, is slightly up on last year – reaching $67.4 billion (up 1.0%) for the November-December 24 trading period.
The forecast has moderately improved after a bumper Black Friday extravaganza and December’s interest rate reprieve.
Across the Pre-Christmas period, food spending is forecasted to encompass the lion’s share of spending, making up $27 billion of the overall spend – up 3.2% from 2022.
The categories of Household Goods (down 3.0%) and Hospitality (down 1.5%) are forecasted for a continued softening of spending in the lead up to Christmas as cost-of-living pressures continue to hold.
Department stores are projected to lead spending growth (up 3.0%), followed by other retailing – which includes categories such as recreational goods, books, cosmetics (up 1.6%) and clothing (up 0.6%).
South Australia is set to record the biggest growth in sales on last year (up 2.6%), followed by ACT (up 2.0%), Western Australia (up 1.6%), Northern Territory (up 1.2%), Victoria (up 1.2%), Tasmania (up 0.9%) and New South Wales (up 0.7%).
Spending in Queensland (up 0.2%) is tipped to record close to neutral growth.
Consumers in New South Wales are forecast to spend $21.3 billion in the pre-Christmas period, with Victorians to spend $17.3 billion.
ARA CEO Paul Zahra said retailers had built momentum during the successful Black Friday sales.
“November trading by all accounts appears to have been strong, despite cost-of-living pressures, as shoppers capitalised on unprecedented deals and sales to tick off their Christmas lists early, and this has helped prop up our Pre-Christmas projections somewhat,” Mr Zahra said.
“With that said, we’re still anticipating overall a subdued Christmas – with most Australian households now turning their attention to Christmas day and finalising their fresh food choices with seafood being at the top of the list.
“The slight increase in spending this year is being inflated by unavoidable supply chain price increases, particularly in food, and an overall increase in Australia’s population,” Mr Zahra said. “If you exclude these factors, overall Christmas spending is in decline.
“This makes for a competitive last week before Christmas amongst retailers, as traders compete for a smaller pool of discretionary spend.
“For most discretionary retailers, up to two-thirds of their profit is made during the all-important Christmas trading period, so December remains a period of uncertainty.
“This holiday period can be a make-or-break for many discretionary retailers.”
Mr Zahra encouraged shoppers to act fast if they are planning to purchase gifts online or post gifts bought in-store, with the Australia Post delivery deadlines looming.
“Once the delivery deadline has passed, shoppers will have no choice but to head in-store to finalise their Christmas gifting lists with e-gift cards remaining a favourite last-minute choice.”
