Australian shoppers are forecast to spend $63.9 billion this festive season despite rising cost-of-living challenges, according to new insights from the Australian Retailers Association (ARA).

Prepared in collaboration with Roy Morgan and Salesforce, the research says festive spending will likely kickstart earlier in Australia and New Zealand, meaning 33 per cent of holiday sales are expected to occur in the first three weeks of November.

ARA CEO Paul Zahra said the forecasts assure businesses that consumers will spend in the face of rising cost pressures in the lead-up to Christmas.

“Christmas is the most critical time of year on the retail calendar and given the financial pressure households are under at the moment, we know that many businesses were feeling nervous about a potential downturn in spending over the festive period,” said Zahra.

“There’s a delayed lag associated with rising interest rates and inflationary pressures, so there will inevitably be a softening of sales, but it appears that won’t occur until next year.”

He added businesses should remain optimistic for this Christmas as Cyber Weekend sales are “growing in popularity” every year, providing retailers with good momentum for their festive trade.

On a state basis, SA will lead this year’s retail sales growth up 6.6 per cent, followed by the NT at 6.5 per cent and Queensland at 4.6 per cent.

NSW is forecast to spend nearly $20 billion in pre-Christmas sales, an increase of 3.1 per cent over last year, while Victoria will spend $16.5 billion, up 0.8 per cent.

The forecast also suggests that 70 per cent of all traffic and 60 per cent of all orders will occur on mobile devices while 25 per cent of all the sales during the holiday period will take place during cyber week.