Bumper Christmas sales tipped to exceed pre-Covid levels

Photo: Note Viriyarat (Copyright Australian Property Journal)
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RETAIL sales are ramping up in the midst of the Christmas shopping season, overshadowing not just 2020 levels but pre-pandemic sales rates.

According to Mastercard SpendingPulse, which looks at both in-store and online retail sales over all payment types, sales in November were up 6.5% on the same time last year and up 16.9% on pre-pandemic levels from 2019, this follows an October increase of 4.2%.

“Retail sales are continuing to accelerate in the run up to Christmas, and that’s music to the ears of many retailers particularly small businesses who are looking to make up for the substantial trading losses they incurred during the Delta lockdowns,” said Paul Zahra, CEO of Australian Retailers Association.

Within this, clothing sales saw a significant boost of 18.9% on the previous year, with household goods also pulling in strong results with a 15% increase on last year.

“There’s a real buzz in the air at our major shopping destinations with people back out and about in droves. Consumer confidence is in positive territory, we had a record-breaking Black Friday, so all the signs are pointing to a buoyant Christmas trading period,” said Zahra.

At the same time, department store sales dropped 4% on last year’s levels, for a fifth consecutive month of declines, despite a 12% increase on October levels.

Food retailing also saw a fall of 1.3% on 2020 rates, though this is still up 9.9% on 2019 results in the same month.

“The pent-up demand for shopping is set to continue in the post-Christmas sales as well with a record $21 billion to be spent in the three weeks from Boxing Day. Most of the borders are coming down, with the states and territories remaining committed to their reopening plans, so businesses have certainty which drives confidence and is critical at this time of year,” added Zahra.

As far as the states and territories nominal sales growth over the month, the ACT was the leader on both 2020 and 2019 results, at a 38.5% and 56.4% respectively.

Compared to last year, Victoria followed with a 10.3% increase, up 15.5% on pre-pandemic rates, with WA up 6.7% on 2020 and 20.23% on 2019, Tasmania up 6.1% on 2020 and 16% on 2019 and South Australia with 5.5% on 2020 and 20.5% on 2019.

While Queensland saw a 4.0% increase on 2020 levels and 10.5% on 2019 and NSW an increase of 3.8% on 2020 and 14.1% on 2019.

The Northern Territory was the only state or territory to report a decline on 2020 levels, down 7.8%, while compared to 2019 rates the NT was still up 12.6%.

Zahra also outlined two major hurdles to retail recovery, namely staff shortages and ongoing supply chain disruptions.

“Supply chains have been an issue for a while now, with domestic and global factors creating a perfect storm for retailers and consumers. Whilst we’re now seeing the gradual return of international students and skilled migrants, staffing will remain a challenge with many businesses unable to trade at their full potential,” concluded Zahra.

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