The retail spending boom is expected to ramp up in Australia following the easing of restrictions nationally with the Australian Retailers Association (ARA) expecting post-Christmas sales across the country to hit a new high of $21 billion this holiday season.
However, the peak retail body warns that the surge in demand for goods and services is meeting stiff headwinds as retailers face ongoing supply chain issues and staff shortages.
The upbeat sales forecast, prepared by the ARA and Roy Morgan, points to a strong trading period from Boxing Day through to mid-January with sales poised to increase 2.1 per cent on the previous year’s already elevated spending spree.
The $21 billion forecast would represent a 12.6 per cent increase on retail spending pre-pandemic in 2019.
The biggest winners from this season’s spending spree are likely to be the hospitality sector where spending is expected to jump 10.7 per cent year-on-year to $2.9 billion.
Supermarkets could take a hit as more people spend their holiday cash on dining out, with the ARA tipping a 1 per cent fall in spending on food compared to 2020. Clothing, footwear and accessories are set to continue their strong rebound with sales to rise 6.9 per cent.
While retail spending will spike nationally this year, not all states will share in the bounty.
Tasmania leads the way with an 8.6 per cent increase forecast, followed by Victoria at 6.6 per cent. Western Australia (3.3 per cent) and South Australia (2.9 per cent) round off the top four.
However, spending is expected to slump 2 per cent in Queensland and 0.9 per cent in the Northern Territory.
ARA CEO Paul Zahra says the upbeat figures nationally reflect strong momentum experienced by retailers in the lead-up to Christmas.
“It’s great to see people out and about in great numbers enjoying some retail therapy after another year disrupted by COVID,” says Zahra.
“We’re continuing to see a lot of pent-up demand for shopping after the Delta lockdowns. We’ve experienced a record-breaking Black Friday with sales exceeding expectations, and that’s provided businesses with strong momentum for this critical trading period.”
The ARA’s post-Christmas sales forecasts measure retail trade from Boxing Day to January 15.
“The Boxing Day sales are a key event on the retail calendar and, with the states and territories staying committed to their reopening plans, we can look forward to a bumper trading period,” says Zahra.
“However, challenges remain with staff shortages and ongoing supply chain issues, which may have an impact on the ability of retailers to expediate their financial recovery.
“We are working closely with government to ensure that any barriers to recovery are solved as quickly as possible.”
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