Michael Hill has delivered positive same store sales across all regions over the Christmas quarter, despite seeing a shift in consumer behaviour due to the success of Black Friday.
The jewelry retailer said it saw a meaningful lift in sales during November due to the consumer excitement surrounding Black Friday, but that this led into a softer first half to December.
“As we anticipated, the Christmas trading pattern changed significantly this year, with a pull forward of sales into November,” Michael Hill chief executive Daniel Bracken said.
“The Australian retail environment was particularly difficult given prevailing low consumer confidence, the competitive environment in our industry segment, together with foreign exchange and gold price headwinds.”
In Australia, while same store sales grew 1.6 per cent to $103.5 million over the quarter, all store sales fell 0.9 per cent due to a reduced store portfolio – having closed 8 stores since the same period in 2019.
In the same period, New Zealand saw same store sales grow 5 per cent to NZ$42.8 million, and all store sales up 5.4 per cent. According to the brand, New Zealand remains its most productive market.
The business’ e-commerce offer saw significant growth during the second quarter, up 47.1 per cent on the same period last year, representing 3.3 per cent of total sales for the quarter and contributing to the 44.3 per cent online growth over the first half.
A shifting season
While Black Friday started as predominately online-focused, the success of the sales event has leaked into bricks-and-mortar retail more and more each year, with the most recent retail trade figures released by the Australian Bureau of Statistics finding retail spend rose 0.9 per cent in November.
“While seasonal adjustment removes regular seasonal patterns associated with Black Friday based on prior results, the strong seasonally adjusted rises in a number of subgroups this month shows that the impact of this Black Friday exceeded that of previous years,” said ABS director of quarterly economic wide surveys Ben James.
NAB economist Alan Oster and Brien McDonald noted that it is likely the event will continue to shift the period where sales occur in the holiday season without necessarily adding to total sales volume.
However, Australian Retailers Association executive director Russell Zimmerman warned that while November sales were strong, it’s likely that December figures will be impacted by the catastrophic bushfires burning across Australia.
“None of us know what December of January will look like – although you’d have to expect the fires to have some degree of impact on trading conditions when we actually see those numbers,” Zimmerman said.
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