Retail spending figures for the past week were up 17 per cent compared to the rest of October, which admittedly was a slower than usual month, according to retail management software provider Vend.
The true impact of the Melbourne Cup will be revealed in the coming days, but it is expected to be similar to last year’s 6 per cent increase in retail spending compared to the October average, according to Vend.
Last year, fashion and apparel stores saw the biggest increase in spending in the week preceding Melbourne Cup, with an 8 per cent rise, followed by salons and barbershops, with a 4 per cent rise, and specialty food and drinks stores and florists, which both saw a 3 per cent increase.
Adelaide led the country, spending 11 per cent more than the October average in the week prior to the Cup last year, followed by Melbourne with 7 per cent, Sydney with 6 per cent and Perth with 4 per cent. Brisbane stores had a 13 per cent drop leading up to the Melbourne Cup last year.
“We’re confident spending will continue to lengthen its stride over the next week, but overall it’s likely to be neck and neck with 2017. Currently the average sales value over the past week is actually three percent lower than it was last year,” Vend country manager Dave Scheine said.
“But even a 6 percent boost in one week like we saw last year is still a real win for retailers – and probably a far better return than most of us will see on our Melbourne Cup bets on Tuesday.”
Squeeze on suppliers
This is in line with Kim McMillan’s sales so far in what she says is the busiest month of the year for her Melbourne business, House of Adorn, which supplies the raw materials to milliners and designers.
“I would say business has been steady with previous years,” she told IR.
For McMillan, the spring racing season begins in July, when designers begin buying materials in bulk to produce hats, fascinators and headpieces for major retailers, including David Jones and Myer.
Smaller designers creating bespoke pieces tend to purchase goods in August and September, followed by do-it-yourselfers, who order materials in October.
“October is our busiest month. We get busy as the weather gets better and people start going to events and weddings,” McMillan said.
In terms of fashion trends, McMillan said that styles tend to last longer in Australia than the UK, where she previously worked as a designer and sold piece through Asos, Fortnum & Mason and Rivers.
“I find Australia a bit more conservative; what may have been in trend last year still works this year. Instead of setting the trend, [Australians] are following the trends,” she said.
But while styles may last longer Down Under, the buying process, as in other parts of the world, is speeding up. McMillan noted that designers used to plan their collections, and purchase materials from suppliers like House of Adorn, a year or at least several months in advance. That is no longer the case.
“It definitely puts more pressure on the designers, because they have to make [products] in shorter amounts of time, and it puts pressure on suppliers, because they’re coming in with a bulk order that we have to source really quickly.”
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.