Unsold inventory means Boxing Day sales may need to go longer
Many retailers say it’s been a softer week for post-Boxing Day sales and the industry’s peak groups believe the discounts may have to continue in order to clear stock.
As millions of dollars change hands since Boxing Day, early feedback from retailers suggests there’s been subdued demand for the traditional post-Christmas sales.
And while the sparkling wine and beer is downed to farewell 2023, it will be with some trepidation by a the nation unsure of what 2024 has in store, and particularly for retailers who nervously wait to see what the Christmas sales have done for their bottom lines.
Retailer feedback so far is that Boxing Day sales have been slightly below initial expectations, and this could spark a fresh round of deep discounting and promotions in January to shift unwanted stock.
The poor weather on the east coast of Australia such as floods in Queensland poses a particular danger to fashion retailers if the summer is a fizzer and they are stuck with summery clothes for winter-like conditions.
Cost-of-living pressures are also putting pressure on the Christmas sales.
Australian Retailers Association chief executive Paul Zahra told The Weekend Australian that feedback from his members and his staff on the ground at a number of cities and retail locations was that retailers were happy with the response from shoppers through the first week of Boxing Day sales.
“So, it’s only been a couple of days but the retailers I have spoken to – and it’s a cross section – have said that they’ve had a good day and met their expectations,” Mr Zahra said.
“The crowds were out in force on Boxing Day and that first day is always a really good indicator to give you a sense of the overall trading performance, and most of the retailers also said that they had a subdued Christmas.
“Now what usually happens if you have an average Christmas you can have a stronger Boxing Day, purely because there’s more inventory and the discounts are deeper than ever.”
Mr Zahra said there was more product on 50 per cent discount than previously – and shoppers were looking for this to help stretch their dollar further.
“And the consumer mindset has been really much more focused on saving, very much trying to save money and that’s what we’ve seen to date,” he said.
“People are very focused on value, very focused on bargain hunting. I was in Sydney city, I had people in each state reporting on the ground and they all said that there were strong crowds.”
Mt Zahra said online shopping was dominating the post-Christmas sales and that retailers reported strong website traffic – particularly from after lunch on Christmas Day.
National Retail Association executive director Rob Godwin said his feedback from retailers was of a softer performance through the week.
Apart from cost of living, the growing popularity of sales in November led by the four days of steep discounts and sales bookended by Black Friday and Cyber Monday, had resulted in purchases being made earlier.
“The consistent feedback is that sales are a bit softer than anticipated – certainly the significance of Black Friday and Cyber Monday sales on Boxing Day sales as we kind of foresaw – with the shift of sales that has been brought forward earlier into November than it is now,” Mr Godwin said.
“This Boxing Day, sales are a few per cent below last year and now that means that Black Friday to Cyber Monday sales over four days is a more significant sales period.”
Mr Godwin said sales of “big ticket” consumer items as well as more discretionary products like fashion were softer this year, which he blamed on household bills.
“There’s no one really outstanding, head and shoulders above anyone in retail, and I just think those interest rate rises now they are biting and one would hope that the RBA hold in the new year as well because the desired effects (of previous interest rate rises) have kicked through,” he said.
Mr Godwin said if Boxing Day sales continued to be soft through to next week then he expected retailers to extend their sales and discount further to shift stock.
“So for the consumer it will be a buyer’s season because you will see those discounts increasing,” he said.
Department stores are tipped to post the most growth among retailers.
Myer chief customer officer Geoff Ikin said: “Our Boxing Day stocktake sale has again been hugely popular across stores and online with customers looking for great value.
“Customers who missed out are still able to get great deals as the sale continues.”
Bunnings managing director Michael Schneider said there had been “lots of customer traffic” in the hardware stores, especially from shoppers needing to clean up after the heavy rains and floods that hit parts of the east coast.
Beacon Lighting chief executive Glen Robinson said consumers were attending its Boxing Day.
“In general, I think consumers are looking for some savings and a bit of a bargain. They still want to have good products but would prefer to get that on sale,” he said.
“So we haven’t seen customers switching to necessarily cheaper or lower quality products … but preferring to buy on sale through Black Friday, Cyber Monday and Boxing Day.
“Customers did enjoy coming out to get those bargains through the sales.”
The poor weather is playing havoc with holiday plans, wrecking or postponing beach parties and outdoor family gatherings and pouring cold water on BBQ plans.
However, a spokeswoman for Endeavour, which owns about 350 pubs across Australia as well liquor stores Dan Murphy’s and BWS, said patronage was high at its pubs and hotels through Christmas.
“Once again Australians have demonstrated their love of getting together and socialising during the festive season – both at home and in our hotels,” she said.
“We served around 45,000 covers on Christmas Day in our hotels and the days before Christmas were again our busiest trading days in Dan Murphy’s and BWS for the year.
“We are anticipating another busy weekend leading into New Year’s Eve as millions of Australians welcome 2024.”
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