Christmas cheer for retailers

It’s predicted more than $64 billion will be spent in the lead-up to Christmas, a 3 per cent increase from last year.

The report, done in collaboration with Roy Morgan, revealed that 59 per cent of Aussie shoppers claim they will spend the same or more (12 per cent) than last year despite growing inflationary pressures.

The report also found the average gift purchase is $700, down slightly ($26) on last year.

Alcohol and food purchases topped the list of intended gift purchases for this year, followed by gifts cards and toys. Men were the most likely to purchase alcohol or food, while women were more interested in small inexpensive gifts or novelties, clothing shoes and sleepwear or books and music. 

Hospitality businesses are also set to flourish in the run-up to Christmas, with over $9 billion in trade predicted, up 16.3 per cent on 2021.

The research also found that around 80 per cent of Australians will purchase Christmas gifts this year — up 2 per cent on 2021 with those aged between 35–49 years spending the most — committing an average of $933 to their gifts, up $111 over last year.

Most Aussies said they will shop at the same time as last year, but almost one quarter (21 per cent) said they will shop earlier.

The majority of shopping will remain in-store with around one-third done online (down 14 per cent points on 2021). Only 1 per cent said they will do 100 per cent of their shopping online.

ARA chief executive Paul Zahra said retailers have a lot to feel confident about this year despite the economic headwinds.

“We are likely to see the robust spending continue for Aussie retail,” he said. “This is encouraging news given the economic circumstances — most discretionary retailers make up to two-thirds of their profit during this critical trading period.

“Many small businesses remain in recovery mode and have seen massive increases in their cost of doing business over the past two years. This forecast spending boost will help boost their dwindling cash reserves.

“Aussies truly plan to eat, drink and be merry this Christmas. It’s no surprise we are seeing a shift towards food and entertaining with the holiday period over the past two years spent in the shadow of lockdowns.

“The news couldn’t come at a better time for the hospitality sector who have endured more pain than most businesses through the pandemic.”

Out of the states and territories, South Australia is set to record the biggest growth in sales on last year (up 6.6 per cent), followed by the Northern Territory (up 6.5 per cent). Consumers in NSW are forecast to spend nearly $20 billion in pre-Christmas sales (up 3.1 per cent on 2021), with Victorians to fork out $16.5 billion (up 0.8 per cent) and Queenslanders $13.3 billion (up 4.6 per cent).

The Black Friday sales are set to provide retailers with strong results in the lead-up to Christmas with ARA-Roy Morgan forecasting sales to reach a record $6.2 billion over the four-day Black Friday/Cyber Monday weekend (25–28 Nov).