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Message from the CEO: 7 November 2016

November 07, 2016

You may have seen some media late last week relating to the Christmas and Boxing Day trading period. The NRA bases its projections for holiday spending on the final two weeks of November and the whole of December. So on that basis, we are getting very close to the busiest part of the year.

Our analysis – based on Australian Bureau of Statistics data and the feedback we are receiving from members around the country – suggests an increase of around 4.0 per cent from last year’s spending totals. If this is borne out, it will add up to $46.5 billion for the 46-day period.

To put that in context, Australians will – for the first time – spend more than $1 billion per day on pre-Christmas shopping and Boxing Day sales. While this sounds impressive, in reality it represents modest growth projections. We know many retailers in many areas of the country have experienced a slow year, largely because of external factors such as the Federal Election.

But we are forecasting Christmas 2016 to better last year’s results in every state and territory, with the larger states leading the way. In specific sectors, we are expecting speciality items and apparel to continue their strong performance of late, and we think department stores will rebound after a sluggish first half to 2016.

The biggest increase is expected in Queensland, which is on track for an increase of 6 per cent at over $9.3 billion, in part due to the NRA’s efforts to relax the state’s restrictive trading laws in the run up to Christmas.

These optimistic figures were backed up by the Australian Bureau of Statistics data, also released last Friday, which showed an increase in consumer spending of 0.6 per cent in September 2016, seasonally adjusted. This follows a rise of 0.5 per cent in August 2016.

These figures may not sound like much, but if the results of the last two months were repeated across the entire year it would result in year-on-year growth of close to 7.0 per cent.

The ABS reported rises in household goods retailing (2.3 per cent), cafes, restaurants and takeaway food services (1.0 per cent), food retailing (0.2 per cent) and department stores (0.5 per cent). There were falls in clothing, footwear and personal accessory retailing (-0.6 per cent) and other retailing (-0.1 per cent) in September 2016.

On state-by-state basis, there were rises in New South Wales (0.8 per cent), Victoria (0.6 per cent), Queensland (0.5 per cent), Western Australia (0.5 per cent), South Australia (0.3 per cent), the Northern Territory (1.2 per cent), Tasmania (0.4 per cent) and the Australian Capital Territory (0.3 per cent).

We understand that these strong figures may not be the reality for all retailers in all parts of the state, but they are a good platform for the upcoming Christmas period. We’ll be watching closely in the hope they continue.

Have a great week.

Dominique Lamb


This message is part of our weekly National Retail Review e-newsletter.
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