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Retailers predicting a tough Christmas period

- November 14, 2019 2 MIN READ
  • Positive sentiment is down, in contrast to 2018, when retailers were approaching the season with a strong sense of optimism.
  • 39 per cent will be discounting pre-Christmas to help drive sales.
  • Only 62 per cent of retailers expect to see higher sales this Christmas compared to last year.
  • Digital continues to be a standout, with 58 per cent expecting to see growth of 10 per cent or more in online Christmas sales.

Deloitte’s annual Retailers’ Christmas Survey 2019 reveals retailers have growing concerns around expected sales over the Christmas period. Once the biggest shopping period of the year, Christmas sales have seen a slump in recent times as consumers tighten their belts as economic conditions worsen.

The survey results suggest positive sentiment is down, in contrast to 2018, when retailers were approaching the season with a strong sense of optimism.

David White, national leader of Deloitte’s Retail, Wholesale & Distribution Group, said: it’s clearly been a tough year for many retailers.

“47 per cent of our survey respondents tell 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 said six in ten retailers are expecting increased sales over the Christmas period compared with 80  per cent in 2018, and nearly 40% are also expecting to see a decrease in seasonal margins.

“This is, unfortunately, the most pessimistic we’ve seen retailers since 2013, “ he commented.

“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.”

White suggested retailers now faced the quandary of when to discount and by how much, describing it as 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.”

As a result, White said 39 per cent of retailers surveyed said they plan to discount before Christmas compared to 31 per cent last year, and 30 per cent in early December.

“And with the proliferation of sales campaigns such as next week’s Black Friday leading into December, many are concerned this could bring forward Christmas trading at discounted prices.”

 

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