Modest Xmas bump tipped for retailers

Christmas spending is set to vary widely from state to state, new figures reveal.

Jess Willmann and Lejla Resulovic shopping at Sunnybank Plaza - Picture: Richard Walker

Australian retailers can expect a modest improvement in sales for the all-important festive season, with new research tipping growth of a little over 2 per cent.

Annual Christmas spending forecasts from the Australian Retailers Association (ARA) and Roy Morgan Research show shoppers likely to spend more than $48.1 billion in retail stores over the period from November 15 to December 24.

The reading represents a 2.3 per cent bump on last year.

“We have been seeing sales trending up and are hopeful as Christmas approaches to see robust sales over the period, with particular categories expected to go gangbusters,” ARA executive director Russell Zimmerman said.

“We know clothing, accessories and footwear have been strong in recent months, and I expect this to continue.”

The research, which takes into account consumer sentiment and labour market conditions, pointed to significant discrepancies from state to state.

The primary laggards were the resource-rich regions of Western Australia and the Northern Territory, where flat sales are anticipated.

In contrast, New South Wales and South Australia are tipped to outperform with gains of 3 and 3.7 per cent, respectively.

“In light of the economic pressures faced by the mining states, the stationary growth figures of Western Australia and the Northern Territory are not surprising, although we are hopeful of improvements in subsequent months,” Mr Zimmerman said.

In terms of categories, department stores are expected to lag, with a 0.1 per cent decline in sales forecast, while apparel retail sales and hospitality should lead the way with growth of 2.8 and 5.7 per cent, respectively.

“This negative growth figure (for department stores) appears to reflect the trading difficulties experienced by Target and Big W as they restructure, although our broader retail trade figures expect a positive upward trend for the segment in future,” Mr Zimmerman said.

“On the other end of the spectrum, it is encouraging to see a 5.7 per cent growth rate predicted for the hospitality category, a strong uptick as Australians are expected to ramp up patronage to restaurants, bars and fast-food retailers in the festive season.”