Shoppers emerge from lockdown splashing cash, retailers expect bumper Christmas, Black Friday trading

Aussie retailers look set to rake in record revenue as shoppers emerge from lockdown brimming with a pent-up urge to splurge.

Aussie retailers look set to rake in record revenue as shoppers emerge from lockdown brimming with an urge to splurge, but a “perfect storm” of supply chain woes mean planning ahead is critical to avoid Christmas disappointment.

All signs are pointing to a bumper festive trading period, with new figures showing consumer spending surged in October as east coast Australians unleashed their pent-up demand after months of being housebound. Retailers expect that will continue in the lead-up to Christmas.

Commonwealth Bank’s new monthly index launched this week showed consumer spending last month jumped 6.6 per cent from September and rose 4.4 per cent from the same period last year, led by travel, transport and entertainment.

The index showed retail spending leapt 9.1 per cent from the previous month and by 4.1 per cent compared with October 2020.

National Australia Bank data also released this week showed lockdown-weary Victorians were particularly champing at the bit to splash some cash, spending more than $2bn in the first fully reopened week from October 30 to November 6.

The biggest chunk of that money was spent on retail, forking out $800m, up 25 per cent on pre-pandemic levels in 2019.

Melbourne’s Bourke Street Mall has been busy as shoppers enjoy their freedom. Picture: NCA NewsWire / Paul Jeffers

NAB found that was 10 per cent more than in NSW, where restrictions were not as long and strict.

NAB group executive for business banking Andrew Irvine said Victoria had roared back to life.

“The optimism is palpable and you can feel business confidence rising,” he said.

“For businesses like hairdressers, retailers and restaurants, this is a critical time for them to seize the opportunity and make the most of the lead-up to Christmas.”

Australian Retailers Association chief executive Paul Zahra said most discretionary stores made up to two-thirds of their profits during the all-important trading season.

“It’s great to see businesses back open and trading after prolonged lockdowns in NSW, Victoria and the ACT,” he said.

“We’re seeing a lot of pent-up demand with people back out shopping in droves and supporting their local businesses.

“Online sales have surged in recent months with a record $4.3bn spent online in September, up a massive 42.6 per cent compared to the same time last year.”

The pent-up demand was on full display as shoppers queued outside stores awaiting their opening, eager to get inside. Picture: Alexandra Middleton

ARA has done forecasts in conjunction with Roy Morgan for the pre-Christmas sales period from November 13 to December 24, tipping $59bn would be spent on everything from food to fashion and homewares to hospitality.

The figure is in line with last year’s spend and 11.3 per cent stronger than the same period in 2019.

Black Friday and Cyber Monday will give momentum, with shoppers expected to fork out a record $5.4bn, the association predicts.

But Mr Zahra pointed out supply chains were under incredible pressure, with myriad issues creating the perfect storm for retailers and consumers.

“Some distribution centres and warehouses continue to be impacted by reduced staffing levels due to Covid cases, we’ve had industrial disputes from delivery drivers and port workers, while state border controls and limited flights are also impacting the movement of goods,” he said.

“At a global level, there’s significant pressure on shipping with container costs escalating up to seven times their usual rate.

Shoppers are urged to get in early to avoid stock shortages and delivery delays. Picture: Asanka Ratnayake/Getty Images

“Retailers have been navigating these sorts of challenges throughout the pandemic and have planned ahead to ensure they have enough stock for Christmas.”

In recent trading updates lodged with the Australian Securities Exchange, many retailers said they had “sufficient” inventory rather than reporting being well stocked.

“The most important thing for shoppers to remember this year for Christmas is that it’s the season to shop early,” Mr Zahra said.

“Planning ahead has never been more important.”

Another important warning comes from Western Australia’s Consumer Protection, which says the Department of Mines, Industry Regulation and Safety’s ScamNet has so far this year closed down about 200 fake websites and almost 100 social media pages that had duped shoppers out of hundreds of thousand of dollars.

They were selling a range of goods, including motorhomes, exercise equipment, popular electronic devices, including the latest mobile phones and game consoles, and pets.