Will Aussies sweeten the pot for retailers by shopping big time this Xmas?

Highlights

  • The Australian Retailers Association (ARA) and its strategic partner Roy Morgan have projected pre-Christmas spending of AU$58.8 billion for 2021.
  • Retail sales in NSW and Victoria that saw sporadic lockdown throughout the year would bounce back strongly at the year-end.
  • Supply chain crisis could impose significant challenges, leading to a shortage of products and an increase in the price of goods.

The festive season is set to ramp up retail settings in Australia, with up to AU$58.8 billion predicted in pre-Christmas sales. As per a new report, the Australian Retailers Association (ARA) and its strategic partner Roy Morgan anticipate that the pre-Christmas spending in 2021 will be at similar levels to the last year’s sales, which were much higher than the pre-pandemic spending in 2019. 

The figure is slightly down from AU$58.9 million in pre-Christmas retail sales in 2020, but over 11% higher than the 2019 levels.

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The Christmas trading season is typically critical to retailers as consumers immerse themselves in shopping. With Australia undergoing one of the most prolonged COVID restrictions, Christmas spending this year could end the dry spell for retailers.    

The report predicts that retail spending in NSW and Victoria, which saw sporadic lockdown throughout the year, would bounce back strongly at the year-end. Meanwhile, a trend also looks favourable for other states not impacted by lockdown, with sales projected to rise steadily this year. 

Shopping, Retailers 

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Hospitality sector could witness significant growth

The projected figures come as a silver lining for the hospitality business, which was the hardest hit by the COVID-19 pandemic. The hospitality sector is expected to witness a surge of over 12% in sales from the last year, indicating significant recovery potential.

The mass roll-out of the vaccination program could offer considerable encouragement to people to take up hospitality services and outdoor activities. 

On the other hand, sales of household goods and department stores are predicted to tumble down by over 7% compared to 2020. 

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Supply crisis can present challenges

While all seems hale and hearty for the Australian retail sector, many experts believe that the supply chain crisis could impose significant challenges.

Recently, the world has been undergoing supply chain challenges as the industrial activity has not been able to keep up at the pace of rising demand post the lifting of lockdown. As a result, it could lead to a shortage of products and an increase in the price of goods. 

ALSO READ: Uncertainty around economic recovery deepens amidst the global supply chain crisis

The end of mortgage holidays and government stimulus payments have already impacted the Australian retail trade. If goods’ prices soar during the festive season, shoppers might be forced to reduce their shopping list.

Given the current scenario, there is a high probability that many Aussies would begin to shop early to dodge off the last moment price surge. 

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