Coronavirus: Christmas season a curate’s egg for retail

The COVID-19 pandemic will make it a story of the haves and have-nots among retailers this Christmas.

The COVID-19 pandemic will make it a story of the haves and have-nots among retailers this Christmas. Picture: Flavio Brancaleone

The COVID-19 pandemic will drive wildly divergent fortunes among the country’s stores this Christmas, with close to 40 per cent of retailers expecting “super­charged” sales growth as a quarter predict business this festive season will be substantially worse than usual.

While the likes of supermarkets and shops catering to the ballooning number of Australians working from home this year have done extraordinarily well, others such as hair and beauty salons, fashion stores, and food catering businesses have struggled to attract shoppers, or have faced devastating restrictions.

Deloitte’s ninth annual survey of executives and senior management in the retail industry found a “strong polarisation” in sales expectations for the all-important Christmas period.

The survey showed 39 per cent of respondents expected festive season sales to exceed last year by more than 5 per cent – close to double the proportion from the 2019 survey. This contrasted with 24 per cent who said they expected sales to decline by more than 5 per cent — in the 2019 survey, no respondents expected Christmas sales to fall by this much.

Deloitte national retail group leader David White said total spending “will likely be lower in 2020” but “many retailers are seeing supercharged demand”.

More than a third of respondents in this year’s survey said they expected Christmas sales to be down against 12 months earlier, against fewer than a fifth in the 2019 survey.

Australian Retailers Association chief executive Paul Zahra said after a “horror year” of bushfires and pandemic, “achieving any level of retail growth in a pandemic is a truly remarkable result. The vibe has certainly shifted towards a recovery — and we are cautiously optimistic about seeing continued positive results from this year’s Christmas trading.”

The survey showed that close to half of respondents expected online sales to jump by more than 30 per cent versus Christmas 2019. Over 40 per cent of respondents said they expected online sales to account for more than 10 per cent of total sales.