Retail Voice CEO Message: 23 November 2022

Paul Zahra

Fri 25 November 2022

News

It’s beginning to look a lot like last Christmas – with most Aussies (59%) claiming they will spend the same or more (12%) than last year despite growing inflationary pressures. Our Christmas Gift Buying Survey in collaboration with Roy Morgan also found the average gift purchase is $700, down slightly ($26) on last year.

Australian retail sales continued to power through the pre-Christmas trading period. Our latest Mastercard SpendingPulse™ results show sales increased 12.9% in October year on year, and were up 28.2% on pre-pandemic levels. Whilst the cycling of Delta lockdowns are a partial factor, these numbers reinforce ARA’s forecasts about the strength of the retail economy in the Christmas trading period. We recognise the impact of rising interest rates and inflation on households and anticipate a lag effect on consumer spending, with a softening of sales likely to occur in 2023.

Unfortunately, the biggest trading challenges for retail right now remain crippling staff shortages and managing rising operating costs and ongoing supply chain disruptions.

The two weeks of climate talks at Cop27 in Egypt have seen an encouraging shift in Australia’s reputation to one of “climate collaborator.” This increase in climate ambition was reflected in our ranking on the Climate Change Performance Index, where Australia rose to 55th this year – a notable improvement on last year where we finished dead last. Read our full summary in our blog.

There remains a lot to be done if we are to limit global warming to below 1.5 degrees. Those wanting to know more about how to create a practical sustainability roadmap can watch our on-demand ARA webinar around retail sustainability. More resources here, including how to become part of the Race to Zero.

Last week the government joined the High Ambition to End Plastic Pollution. This Coalition calls for binding global rules that would bring plastic use down to manageable levels and increase the use of recycled content. The Australian Government has pledged that 100% of all virgin plastics or recycled or reused by 2040. The joining of this Coalition is a positive step forward, as the retail sector desperately needs a consistent, national plan to guide the ongoing phase-out of unnecessary and problematic single-use plastics.

As we enter the last parliamentary sitting weeks of the year, the Government’s proposed changes to the workplace relations system remain hotly contested. While we support sustainable wages growth, more secure work for the retail workforce and more enterprise-level bargaining, we remain deeply concerned about the extension of multi-employer bargaining, which will increase complexity and costs for employers without any guarantee of improving pay and conditions for employees. Read more here.

Wishing everyone a powerful Black Friday and Cyber Monday sales period. Our predictions show this will provide retailers with strong results in the lead up to Christmas with ARA-Roy Morgan forecasting sales to reach a record $6.2 billion over the four-day Black Friday/Cyber Monday weekend (25 – 28 Nov).

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