Christmas spending injection on its way as Aussies splash out $50 billion ahead of Christmas

WHILE retailers are gearing up for a much-needed boost in the lead-up to Christmas, research shows shoppers are reining in their spending.

SHOPPERS are tipped to splash a whopping $50 billion into the economy in the lead up to Christmas in a much-needed boost for retailers.

New figures released by Roy Morgan and the Australian Retailers Association (ARA) today has revealed spending will be up by 2.8 per cent compared to the same trading period last year.

While spending will be up in 2017 the increase is not as much as previous years — in the same period last year spending climbed by 3.5 per cent.

The biggest boosts to spending will be on food and household goods.

And while shoppers will be battling busy crowds in the lead up to December 25, many consumers will be making purchases from the comfort of their own home — online spending is tipped to be up by 3.96 per cent.

With less than six weeks until Christmas shoppers need to start getting organised. Picture: iStock

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The ARA’s executive director, Russell Zimmerman, said the next six weeks is vital for retailers who need a cash injection after subdued spending in recent months.

“This is very important to retailers, more retailers will get to somewhere around 60 per cent of their turnover and profit in the lead up to Christmas and following Christmas,’’ he said.

ARA executive director Russell Zimmerman said retailers are relying on strong Christmas sales. Picture: Supplied

“Hopefully they can do that without having to discount too much — the biggest increases to spending will be in NSW and Victoria.”

Food will see the steepest climbs in spending — rising by 3.27 per cent following by household goods which will also get a reasonable boost, climbing by 2.37 per cent.

But the fashion sector including clothing, apparel and accessories will see the smallest spending increases at just 0.54 per cent.

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Retailer Gerry Harvey expects strong sales in the coming weeks and isn’t concerned by the expected spikes in online shopping and potential arrival of Amazon before Christmas.

Gerry Harvey is optimistic about strong consumer spending in the lead up to Christmas. Picture: John Feder/The Australian

He is urging consumers to get their shopping lists and purchasing of presents ready now.

“If spending keeps going the way it is I’m expecting we will be up in November and December by 2.5 to four per cent,’’ he said.

“An awful lot of people won’t buy online in December because they will be worried that they might get the item or not.”

Myer’s head of stores Tony Sutton expects personalised gifts to be popular and he said the store’s instore “one-stop shop” for customers — the Giftorium will also be popular.

“Our online has been growing at a pretty rapid rate and we expect that to continue during the Christmas period,’’ he said.

“Click and collect is becoming more popular particularly during the Christmas period and we also have same-day delivery or next-day delivery or standard delivery.”

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2017 PRE-XMAS FORECAST

NSW $16.2 billion +3.65%

Vic $12.7 billion +3.87%

Qld $9.9 billion +1.15%

SA $3.2 billion +3.23%

WA $5.4 billion +0.89%

Tas $996 million +3.01%

NT $508 million +1.77%

ACT $911 million +1.76%

CATEGORY SPENDS

Food $20.2 billion +3.27%

Household goods $8.7 billion +2.37%

Clothing, footwear, accessories $3.9 billion +0.54%

Department stores $2.9 billion +0.99%

Other retailing (including online) $7.1 billion +3.96%

Hospitality $7 billion +2.89%

Source: Roy Morgan/ARA, rounded up figures.