Shoppers ready to spend big post lockdowns with predictions of a $58bn Christmas boom: ARA report

Retailers should get ready for a rush on clothing, footwear and dining that will drive festive spending above pre-pandemic levels, a new report says.

Shoppers are eager to spend up for Christmas with a new report forecasting $58 billion to be spent in the lead up to the Christmas holidays. Picture: Sam Ruttyn

Following the end of lengthy lockdowns in Sydney and Melbourne, Australians are set to spend up big with predictions of bumper Christmas sales of around $58b for the nation’s retailers.

It is in-line with last year’s spending spree, but up 11.3 per cent on pre-pandemic levels.

And it will be clothing, footwear and accessories that are set to lead the pack and become the most popular retail category for shoppers to spend their cash on as they spruce up their wardrobes and purchase new season fashion to reunite with family and friends and attend events for the first time in months.

The Australian Retailers Association and research firm Roy Morgan are predicting this year’s pre-Christmas spending will broadly match last year’s high and be significantly above 2019 pre-pandemic spending. The ARA-Roy Morgan 2021 pre-Christmas Retail Sales predictions forecast that overall spending will come in at $58.8 billion, virtually unchanged on last year, but up 11.3 per cent on Christmas 2019.

“To achieve last year number is a pretty impressive feat because it was up 11.3 per cent and I can’t remember ever in my career — and I have been in the industry more than 40 years — double digit growth in that quarter, so actually to maintain that level is outstanding,” ARA chief executive Paul Zahra said.

Mr Zahra said most of the growth this year will be driven by clothing, fashion as well as restaurants and hospitality as consumers yearn for a return to some kind of normality that includes socialising and experiences.

“I think there’s no doubt there will be a focus on experience because we have not been able to connect, so people will be out and about and we are obviously seeing that in restaurant and cafe numbers.

“I do think it is a refocus, a return to experiences but in saying that clothing is also to grow, people will move from buying household goods because there was such a significant increase last year.

“Clothing and footwear and accessories are a big opportunity as consumers will be able to go to events, they will be able to go out, face to face and want to refresh their wardrobe because they have not done that for some time – and people’s waistlines might have changed through lockdowns.”

Tasmania is forecast to have the strongest growth in sales towards Christmas with Western Australia and Tasmania also strong, according to the ARA Roy Morgan report. Other states might see slight declines, but this is off a strong pre-Christmas trading period in 2020 that set new records in sales growth.

“Overall though, the outlook is positive in the lead-up to Christmas and there’s a lot to be cheerful about in this years’ predictions,” Mr Zahra said.

“There’s a lot of Christmas cheer in these numbers, with the overall trend looking positive, and that is great news for small businesses and discretionary retailers who have suffered through some of the longest lockdowns in the world this year. The Christmas trading period is critical as it’s the time when most discretionary retailers make up to two thirds of their profits for the year.”

Mr Zahra said since the reopening of NSW non-essential retail and the state emerging from lockdown the sector had witnessed a strong rebound in sales momentum.

“By all accounts it has been seamless and we expected high levels of customer aggression given we were asking for people’s vaccination certificates but in fact there has been very few incidents reported and to me personally there has been none.

“People who are shopping are spending significantly more, that’s what we are seeing, in NSW they have got 100 days of shopping to catch up on and coming out of winter into summer.”