Retailers’ Christmas Survey 2019

Christmas survey, shoppers, small retailers

The challenging market conditions that have characterised 2019 are top of mind for Australian retailers as they enter the all-important Christmas trading period.

According to Deloitte’s Retailers’ Christmas Survey 2019, positive sentiment is down, in strong contrast to 2018, when retailers were approaching the season with a strong sense of optimism.

Now in its eighth year, key survey findings include:

  • Only 62 per cent of retailers expect to see higher sales this Christmas compared to last year, down from 80 per cent last year.
  • Just under 40 per cent are expecting to see some form of Christmas period margin decrease.
  • 39 per cent will be discounting pre-Christmas to help drive sales.
  • Digital continues to be a standout, with 58 per cent expecting to see growth of 10 per cent or more in online Christmas sales.
  • 72 per cent expect to see positive sales growth in calendar year 2020, down from more than 90 per cent for 2019.

David White, national leader of Deloitte’s Retail, Wholesale & Distribution Group, said, “It’s clearly been a tough year for many retailers, with 47 per cent of our survey respondents telling us they’ve experienced flat or negative sales growth over the past 12 months. So, it’s probably no surprise many are also approaching this Christmas with a little less cheer, certainly compared to last year.”

White added, “Many have pinned their hopes on federal government tax cuts, but the latest trading data suggests consumers have chosen to keep any windfall in their pockets. Retailers are no doubt hoping they’ve been saving up for Christmas.

“As always, when to discount and by how much remains a critical decision for retailers over the holiday period. Last year they told us they were intent on holding strong. But with difficult trading conditions 12 months later, this will be challenging, with 39 per cent of retailers planning to discount before Christmas compared to 31 per cent last year, and 30 per cent in early December, White said.

“The cautious consumer has brought good old customer service back to the fore, as retailers can no longer rely on buoyant spending to drive in-store trade.”

White also noted that there are signs of more optimism amongst retailers for their prospects in 2020.

“They’re still hoping for the best, with some 72 per cent expecting to bounce back and grow their top line. But with most not forecasting growth in excess of five per cent, it still looks like another challenging year ahead,” he said.

“It’s certainly critical that within the retail ecosystem, retailers, suppliers and landlords work together, rather than against each other. Ultimately, uncertainty kills confidence, and global economic turbulence certainly isn’t helping. Australian retailers will be waiting for a recovery in wage and jobs growth to provide a boost where interest rates and government tax cuts fail to provide the stimulus needed.”