Pre-Christmas Retail Spending Up in 2023, Estimates Suggest

The two months leading up to Christmas are often critical for Australia’s retail sector, and this year is no different, with pre-Christmas spending in 2023 tipped to edge in line with last year’s results.

The two months leading up to Christmas are often critical for Australia’s retail sector, and this year is no different, with pre-Christmas spending in 2023 tipped to edge in line with last year’s results.

In conjunction with Roy Morgan, provisional forecasts by the Australian Retailers Association (ARA), predict $66.8 billion will be spent in the November to December 24 Christmas trading period, up 0.1% (or $74,000) from last year.

The preliminary projection is subject to the Reserve Bank of Australia’s rate decision on Tuesday (RBA) as well as the Australian Bureau of Statistics (ABS) retail trade data in the months leading up to Christmas.

Although high inflation and rising costs are contributing to a cost-of-living crisis, this hasn’t seemed to dampen consumer spending.

ABS data shows that 2023 household spending in Australia increased by 4.9% from last year (to September), although this was largely isolated to services spending (+9.6%), with goods spending down by 0.1%.

While surging grocery prices, high fuel costs, growing mortgage payments and the potential of another RBA rate rise hovers over many Christmas budgets, consumers appear to be cashing out over particular social celebrations and pre-Christmas sales days.

Last week’s Halloween celebrations showed this trend, with the retail sector expecting a pre-Christmas cash injection close to $490 million, up by $60 million from 2022.

There are also signs that shoppers are getting a jump on festive spending and making the most of sales days. 

Data from e-commerce logistics platform Shippit suggests more consumers logged on to the annual “Click Frenzy” sales event, which runs in the last week of October, compared with last year.

Shippit parcels data showed a 10% increase in orders for 2023’s event, with the value of orders up 4.7% to about $112 per order this year.

Renowned for having some of the biggest pre-Christmas bargains, the Black Friday and Cyber Monday sales are expected to reflect this, with a rise in spending, according to ZARA CEO, Paul Zahra.

“We’re expecting significant traffic in-store and online, with sales to reach $6.36 billion this year – an increase of $188 million (or 3%) on 2022,” Mr Zahra stated.

Zahra speculated that the reason behind this boost in retail sales is due to Australians adopting the typically American shopping tradition in droves, with ‘millions of Aussies set to take part this year.’

Adding that consumers were more “budget-conscious” in light of the cost-of-living crisis, Zahra added that “the Black Friday sales are an ideal time to grab a bargain and save some unnecessary stress in the weeks before Christmas.

Past performance is not a reliable indicator of future performance.

 

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