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Discounts expected to drive $18.3b in post-Christmas sales

Consumers are expected to spend $18.3 billion between December 26 and January 15 next year, 3.1 per cent more than the same period last year, according to the Australian Retailers Association (ARA) and Roy Morgan.

That is on top of the $51 billion shoppers are forecast to shell out between November 9 and December 24, which is 2.9 per cent higher than the 2017 Christmas trading period, according to research released by the ARA and Roy Morgan last month.

These are optimistic forecasts, given the declining consumer confidence and flat month-on-month growth in the months leading up to the holiday.

But industry experts believe that Boxing Day discounts offered by retailers looking to reach yearly sales targets prior to the start of 2019 will drive consumers into stores and incentivise them to spend post-Christmas.

“While the Australian retail landscape has faced various challenges throughout the 2018 year, we anticipate our pre-Christmas and post-Christmas predictions will be fulfilled and reflected next year through the arrival of ABS trade figures for December and January,” Russell Zimmerman, executive director of the ARA, said.

The ARA and Roy Morgan are predicting varied growth across categories, with food and apparel forecast to see the biggest jump year-on-year in post-Christmas spending (3.8 per cent), and department stores to see the smallest (0.4 per cent).

The 2.9 per cent increase in the ‘other’ category, which includes e-commerce, reflects the large number of consumers heading online to take advantage of discounts, the ARA said.

“With 2018 drawing to a close, Aussies will be stocking their fridges and purchasing new outfits ahead of the upcoming New Year festivities. As we ease into the summer months, we expect consumers will also be purchasing school uniforms as the kids head back to school,” Zimmerman said.

Victoria is forecast to see the biggest increase in post-Christmas spending, up 5.5 per cent on the previous corresponding period, followed by Tasmania (4.4 per cent), the ACT (3.4 per cent), NSW and South Australia (3.1 per cent), Queensland (1.9 per cent), the Northern Territory (1.3 per cent) and finally WA (-0.4 per cent).

“Although New South Wales are dominating this year in terms of total spend, Victoria and Tasmania should prove to be fierce contenders in overall growth terms during the post-Christmas sales, which will hopefully translate well-into the New Year,” Zimmerman said.

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