Retailers reap rewards of Christmas
Retailers were promised a Christmas spending bonanza in 2014, with pre and post-holiday sales figures estimated to top 2013/14 levels, and although consumers were slow to hit the shops in the lead up to Christmas Day the latest figures have given traders a much needed confidence boost ahead of the new year.
According to the latest retail sales figures by the Australian Bureau of Statistics (ABS), spending grew five per cent, seasonally adjusted, in November 2014 compared to November 2013, marking a positive start to the holiday trading period.
Following the release of November’s sales figures the Australian National Retailers Association (ANRA) said the retail sector was on track to achieve one of its best years since the GFC, returning to long term average growth levels not seen since 2008.
In the lead up to Christmas, ANRA estimated more than $32.6 billion would be spent in total sales in the four weeks to Christmas, a slight increase from 2013.
More than $8 billion was predicted to be spent nationally in the final week ahead of Christmas, with almost $3 billion going through the tills on the last weekend before Christmas Day.
This last minute rush was mainly noted by bricks and mortar retailers. Appliances Online COO, Peter Harris, told Inside Retail PREMIUM the online retailer saw a spike in sales from December 6 until December 20, as Australian consumers remained hesitant to buy online in the last days to Christmas.
Online payments firm, eWay, says consumers spent $1.6 billion online in December, up from $1.53 billion in November, but down on October, when sales peaked for the year at $1.57 billion.
Over the past few years, December online sales growth year on year has been growing at a much slower rate, but Christmas 2014 managed to buck the trend. December sales increased 22 per cent, from 17 per cent the year prior, however, sales volumes slowed in the week before Christmas.
“Australian consumers are still very wary of buying products so close to Christmas and not getting delivery, so while we’re trying to educate consumers to do their last minute shopping online, I think a lot of them are still quite cautious,” Harris said.
The Australian Retailers Association (ARA) predicted more than $2 billion to go through the tills on Boxing Day, a year on year increase of $72 million, making it the first time Australians have spent more than $2 billion in a single day.
More than $16 billion was forecast to be spent in the first three weeks of January. Consumers who chose to skip the sale crowds spent $35.8 million online in one day, according to eWay, up 17.4 per cent on last year.
Harris said Appliances Online’s pre-Christmas sales and Boxing Day both surpassed expectations, tracking double digit growth.
“The biggest category growth has been AV. We’ve seen that a lot of consumers tend to hold off and then purchase AV around Boxing Day, and we know especially in our space that there are some very good deals available.
“Pre-Christmas, the ‘smalls’ category had a larger increase, but unlike last year where it didn’t follow on to the Boxing Day sale, the smalls category has also been really strong post-Christmas,” he said.
Graeme Popplewell, CEO of fast fashion chain, Glassons, told Inside Retail Premium Christmas trade was been better than expected across both its Australian and New Zealand networks.
“We’ve been happy with Christmas trade. I think a number of retailers will also experience really strong post-Christmas trade.”
Mark Robinson, director of QBD The Bookshop, said discounting for the Queensland-based book chain began on Boxing Day following a solid lead up to Christmas, recording around eight per cent year on year store growth.
“We were feeling confident coming into Christmas and we finished in that position as well,” Robinson said.
“I would say that it has been a better Christmas in terms of solid spending right up until Christmas Eve this year. There wasn’t really a drop off, it was solid coming in and it maintained speed right through,” he said.
The book chain also reaped the benefits of extended trading hours in South Australia. The move to extend trading in both Western Australia and SA this Christmas was a festive first for both states.
Despite strong sales across all three of QBD’s Adelaide stores, Robinson said online still remained a challenge.
“Online was also up significantly this year on last year, but continues to be a tough market. It’s very competitive and there’s not a lot of money in it with freight and the amount of discounting you have to do.”
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