Despite the modest gains seen in retail during February and March, Australia-wide spending has dropped substantially during the Easter period. The week leading into Easter saw a five per cent reduction in retail spending across the board.
Retailers don’t need to be alarmed, as this has been a recurring trend for the last three years, whereby a similar drop in spending has occurred every year leading into Easter in fashion, furniture, sports, and other retail with the largest dive in furniture in 2012 at 21 per cent. This year however, furniture dropped 20 per cent, just short of the 2012 record.
Generally speaking, Australians heading into Easter are thinking more about holidays, rather than purchasing large ticket items, with a likely increase in the hospitality industry.
Over the past four years, fashion has dropped up to 10 per cent every Easter period, and this year saw its lowest drop of only 1.2 per cent the week leading into Easter, which is positive news for fashion.
Traditionally, the week following Easter has seen a rise in sales every year from 2012 – up to 18 per cent in both fashion and furniture.
The years 2012 and 2013 saw the highest growth in sales the week after Easter in line with the mining boom.
Easter sales drop in every sector
This year however, there was no rise recorded in any industry, with overall sales dropping 15 per cent in every sector. The least affected was sporting, with a drop of only four per cent.
The contributing factors to the post-Easter drop in sales can be attributed to general concerns around job security; anticipation of interest rate changes; and importantly, the falling Aussie dollar, which is affecting retailers’ pricing strategies.
Imported goods like electronics, fashion, and furniture are the hardest hit by the falling Australian dollar, putting increased pressure on Australian retailers to increase their prices or discount more than they ordinarily would coming into Autumn.
Despite this, we are continuing to experience steady but small economic growth of around 2.5 per cent, as reported by Roy Morgan, in contrast to our European and US counterparts who are slowing their economic growth even further.
In addition, online sales and growth in retail is steadily rising so retail stores who are beginning to prepare themselves for their future online growth with responsive webstores are on the right path.