ARA: Positive Sentiment Sets the Tone for the Christmas Shopping Season

The Australian Retailers Association (ARA) says the all-important Christmas shopping season has kicked off

confidently, and pleasingly with some strong Covid-hurdles behind it.


ARA CEO Paul Zahra said, “the day after the Melbourne Cup is when the Christmas shopping season

traditionally gets underway, and there is much to be optimistic about. Victorian retailers are open for business.

Consumer confidence is at an eight-month high. And yesterday’s Reserve Bank decision, assuming the banks

pass on the rate cut, should help many Australian homeowners feel a little more comfortable about their spending

ability.”


Retail Sales Outlook


Mr Zahra said, “the final ABS Retail Trade Figures for September were revised slightly higher to a 1.1% drop

over the previous month from the preliminary drop of 1.5%. The year-on-year figure remains strong, having risen

to 5.6% driven predominately by government stimulus.


“Pleasingly, except for Victoria which was still in lockdown, all states and territories recorded strong year on year

sales growth.


“The online component which was 10.6% of overall sales in September was a positive result demonstrating

consumers still had a strong appetite for shopping online. Whilst this has remained in rapid growth during Covid,

we would like to see more retailers continue to benefit from this growth by improving their online presence, as it

is now a vital component to a successful retail offering – particularly in a pandemic.”


Household goods (+16.4%) and food retailing (+12.3%) continued to show strong year on year growth, whilst

clothing, footwear and personal accessories continued to struggle – showing a decline year on year of -9.8%

along with cafes, restaurants and takeaway food with a -15.1% decline. Department stores also showed a -5.2%

decline year on year.


According to Mr Zahra, “the category performance reflected the change in lifestyle as people were forced to

socially-distance and hence, stay, play and work from home; many choosing to spend their discretionary income

on their home environments.


“Whilst the overall retail performance is promising, we continue to see winners and losers with clothing, footwear

and personal accessories and cafés and restaurants remaining affected by health restrictions alongside CBD

retailers and those impacted by protracted Victorian lockdowns. Department store performance was affected by

their greater exposure to CBD declines in foot traffic.


“Whilst we are hopeful that Christmas spending will give a much-needed boost to these retailers, we remain concerned about their longer-term performance once JobKeeper and JobSeeker end in the coming months,” he said.


Consumer Confidence


The latest ANZ-Roy Morgan Consumer Confidence results out this week, have shown a ninth straight weekly increase to 99.9.


Mr Zahra added, “this is the highest level we have seen since the middle of March. Given everything the Australian consumer has had to battle this year, this is a very encouraging report, as we kick off the Christmas shopping season, which is when retailers make up to two-thirds of their profits.”

For ABS data:

https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/sep-2020



ENDS…for more details: ARA Media Team (m) 0431 045 373 (e) media@retail.org.au About us: founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $340bn sector employing more than 1.2m people. As Australia’s premier retail body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members. To learn more, visit www.retail.org.au or call 1300 368 041.


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