Pre-Christmas retail trade for 2021 predicted to remain steady year-on-year at $58bn
Christmas retail sales are predicted to stay unchanged from 2020 according to the latest Roy Morgan data but a majority of sales will be online.
The Roy Morgan data also values (for the first time) the impact of the most recent lockdowns on retail trade at $131 million per day across the economy.
“Unsurprisingly, these impacts have been most keenly felt in NSW and Victoria, at $40.4 million and $55.2 million per day respectively. And it’s also unsurprising that the most impacted categories were hospitality and clothing, footwear and accessories, at $71.7 million and $55.7 million per day respectively,” Australian Retailers Association chief executive Paul Zahra said.
“These impacts will continue to weigh on annual growth in retail trade and will be compounded by the reduction [of] Government stimulus payments and the end of ‘mortgage holidays’ for tens of thousands of Australians in coming months. We also have to remember that the sector is cycling some very high numbers off the back of a bumper Christmas last year.”
The ARA-Roy Morgan 2021 pre-Christmas Retail Sales predictions forecast that overall spending will come in at $58.8 billion, virtually unchanged on last year, but up 11.3 per cent on pre-pandemic conditions.
The ARA and Roy Morgan said this year’s pre-Christmas spending will broadly match last year’s high and be significantly above 2019 pre-pandemic spending.
“There’s a lot of Christmas cheer in these numbers, with the overall trend looking positive, and that is great news for small businesses and discretionary retailers who have suffered through some of the longest lockdowns in the world this year. The Christmas trading period is critical as it’s the time when most discretionary retailers make up to two thirds of their profits for the year,” Mr Zahra said.
“Although the ARA-Roy Morgan data predicts the impact of Covid lockdowns will continue to suppress retail sales, year-end spending in NSW and Victoria will bounce back strongly in December. And those states not impacted by lockdowns will enjoy a more gradual ramp-up in sales growth leading into Christmas. The overall trend is looking positive.”
Roy Morgan CEO Michele Levine said the sales forecasting shows there is pent-up consumer demand.
“No one believed that spending this coming Christmas could match the highs of last year, but as the population emerges from the most punishing crisis in a hundred years, shoppers are looking to reward themselves and their families,” she said.
“The sales aren’t all going to be instore, however. The COVID five-year digital acceleration means many more Australians are shopping online, so this Christmas we will see much more of a mix between in-store and online shopping.”