ARA executive director, Russell Zimmerman, says sales have been trending upwards, which gives retailers confidence that there will be robust sales over the period between November 15 to December 24.
While department stores sales are expected to shrink 0.1 per cent on 2015, hospitality sales are predicted to grow by 5.7 per cent.
"(That is) a strong uptick as Australians are expected to ramp up patronage to restaurants, bars and fast-food retailers in the festive season," says Zimmerman.
"Growth was varied among the retail categories, with a predicted figure of -0.1% for department stores reflecting the most significant downturn in the projections.
"This negative growth figure appears to reflect the trading difficulties experienced by Target and Big W as they restructure, though our broader retail trade figures expect a positive upward trend for the segment in future."
The ARA has partnered with Roy Morgan Research to compile the projected spending figures, with factors including consumer sentiment and unemployment taken into consideration. In 2015, the ARA and Roy Morgan accurately predicted the total Christmas spending figure of $46.7 billion, with actual sales reaching $47 billion for the period.The ARA has provided pre-Christmas spending forecasts for more than 20 years.
"In light of the economic pressures faced by the mining states, the stationary growth figures of Western Australia and the Northern Territory are not surprising, though we are hopeful of improvements in subsequent months," says Zimmerman.
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