Invest
Pre-Christmas retail expected to match 2020 highs
Experts say that pent-up demand will properly match pre-Christmas retail spend to $58.8 billion.
Pre-Christmas retail expected to match 2020 highs
Experts say that pent-up demand will properly match pre-Christmas retail spend to $58.8 billion.
With lockdowns on the wane, expectations are high that consumers will spend to make up for lost time.
According to the Australian Retailer Association (ARA) and Roy Morgan, overall spending for pre-Christmas retail is expected to come in at around $58.8 billion.
While this figure is more or less in line with pre-Christmas retail spending in 2021, it still represents an 11.3 per cent increase on pre-pandemic conditions.
Roy Morgan CEO Michele Levine said that the company’s forecast reveals a country on the move, and one with all the usual signs of pent-up demand.
“No one believed that spending this coming Christmas could match the highs of last year, but as the population emerges from the most punishing crisis in a hundred years, shoppers are looking to reward themselves and their families,” she said.
However, partially as a consequence of the pandemic, Ms Levine noted that a greater proportion of this seasonal spending is going to be online.
“The COVID five-year digital acceleration means many more Australians are shopping online, so this Christmas we will see much more of a mix between in-store and online shopping,” she said.
ARA CEO Paul Zahra said that the positive trend in spending was a positive sign for retailers and small businesses battered by the conditions and restrictions of the pandemic.
“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,” he said.
Roy Morgan’s latest dataset also put a price on the economic impact of recent lockdowns, estimating that it suppressed as much as $131 million in retail trade per day.
“Unsurprisingly, these impacts have been most keenly felt in NSW and Victoria, at $40.4 million and $55.2 million per day, respectively,” Mr Zahra noted.
“These impacts will continue to weigh on annual growth in retail trade and will be compounded by the reduction in government stimulus payments and the end of ‘mortgage holidays’ for tens of thousands of Australians in the coming months.”
While the retail sector is cycling off the back of a bumper Christmas last year, Mr Zahra said that this latest release of pent-up consumer demand couldn’t have come at a better time.
“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,” he added.
Breaking the numbers by state, Roy Morgan expects retail trade to grow the most in Victoria, Tasmania and the ACT. However, with NSW and WA largely flat and Queensland, SA and NT expected to contract, 2021’s sum total here isn’t all that different to 2020’s.
For those who still need to start on their Christmas shopping, Mr Zahra said that haste may be a virtue.
“With elevated online sales, suppressed shopping demand, global supply chain disruptions and local delivery issues, the key message to consumers for this Christmas [is] ‘tis the season to shop early,” he said.
RELATED ARTICLES
About the author
About the author
Economy
Inflation concerns grow as consumer price index rises, prompting potential interest rate hikes
The latest Consumer Price Index (CPI) data has sparked fresh concerns about inflation in Australia, with experts suggesting that further interest rate hikes may be on the horizon. The CPI, a key ...Read more
Economy
State Street economist comments on latest labour force data amid market anticipation
The latest labour force data, released today, has prompted a measured response from financial experts, with insights provided by Krishna Bhimavarapu, APAC Economist at State Street Investment ...Read more
Economy
RBA's interest rate hike impacts Australian employment landscape
The Reserve Bank of Australia (RBA) has decided to increase interest rates by 25 basis points, raising the cash rate to 3.85%. This move, aimed at controlling inflation, has elicited responses from ...Read more
Economy
RBA’s latest rate hike sparks debate over economic impact
In a surprising move, the Reserve Bank of Australia (RBA) has increased the cash rate, signalling a significant shift in its monetary policy approach. This decision comes amid a backdrop of unexpected ...Read more
Economy
When inflation reopens the rate door: A broker-sector case study in defending margins, clients and share
Australia’s latest trimmed-mean inflation reading at 3.3% has revived the prospect of another Reserve Bank move and put lenders, brokers and borrowers back on a tightening footing. This case study ...Read more
Economy
Inflation rise dampens hopes for interest rate cuts as employment dynamics shift
In a development that has dashed hopes for an interest rate cut, Australia's Consumer Price Index (CPI) has surged back to 3.8%, erasing the progress made since October. This unexpected rise in ...Read more
Economy
Inflation surge poses challenges for small businesses and consumers
The latest inflation figures have sparked concern among Australian businesses and consumers alike, with the rising costs expected to influence the Reserve Bank of Australia's (RBA) upcoming interest ...Read more
Economy
Australia’s spending surprise raises the odds of a February rate move — here’s how to protect margin and momentum
Household outlays are running hotter than economists expected, with the latest ABS readings showing broad-based gains across services and goods. That resilience is exactly the kind of demand impulse ...Read more
Economy
Inflation concerns grow as consumer price index rises, prompting potential interest rate hikes
The latest Consumer Price Index (CPI) data has sparked fresh concerns about inflation in Australia, with experts suggesting that further interest rate hikes may be on the horizon. The CPI, a key ...Read more
Economy
State Street economist comments on latest labour force data amid market anticipation
The latest labour force data, released today, has prompted a measured response from financial experts, with insights provided by Krishna Bhimavarapu, APAC Economist at State Street Investment ...Read more
Economy
RBA's interest rate hike impacts Australian employment landscape
The Reserve Bank of Australia (RBA) has decided to increase interest rates by 25 basis points, raising the cash rate to 3.85%. This move, aimed at controlling inflation, has elicited responses from ...Read more
Economy
RBA’s latest rate hike sparks debate over economic impact
In a surprising move, the Reserve Bank of Australia (RBA) has increased the cash rate, signalling a significant shift in its monetary policy approach. This decision comes amid a backdrop of unexpected ...Read more
Economy
When inflation reopens the rate door: A broker-sector case study in defending margins, clients and share
Australia’s latest trimmed-mean inflation reading at 3.3% has revived the prospect of another Reserve Bank move and put lenders, brokers and borrowers back on a tightening footing. This case study ...Read more
Economy
Inflation rise dampens hopes for interest rate cuts as employment dynamics shift
In a development that has dashed hopes for an interest rate cut, Australia's Consumer Price Index (CPI) has surged back to 3.8%, erasing the progress made since October. This unexpected rise in ...Read more
Economy
Inflation surge poses challenges for small businesses and consumers
The latest inflation figures have sparked concern among Australian businesses and consumers alike, with the rising costs expected to influence the Reserve Bank of Australia's (RBA) upcoming interest ...Read more
Economy
Australia’s spending surprise raises the odds of a February rate move — here’s how to protect margin and momentum
Household outlays are running hotter than economists expected, with the latest ABS readings showing broad-based gains across services and goods. That resilience is exactly the kind of demand impulse ...Read more
