Retailers ‘cautiously optimistic’ about Christmas shopping despite pressure on cost of living

The 2022 Deloitte Retailers Holiday Survey assesses sentiment for the looming Christmas period and identifies expectations for the coming year.

As a result, 67% expect sales to increase over the Christmas period, down from 80% last year.

A further 58% expect consumer confidence to deteriorate over the next year.

Other key findings include:

• From 37% in 2013, 24% said December was an important trading period.
• 58% are confident their logistics team can meet demand, up from 29% last year.
• 43% expect flat margin growth this year.
• 45% expect more than 10% online sales, compared to 55% last year.When
• 48% say data privacy is a major risk to their business as a result of increased collection of customer data.

Melissa Dean, Deloitte’s National Retail, Wholesale and Distribution Leader, said the past decade has seen more fundamental changes in the retail industry than ever before, due to the potential of e-commerce.

“The giants of the online retail industry have proliferated and created a booming fulfillment industry.

“As retailers begin to look past Covid-19, technology, innovation and new business models will enable the industry to leverage emerging consumer behaviors to define what the shopping experience of the future will look like. There is a feeling that you will be able to take a big step in

“Despite the current economic uncertainty, Australian consumers still love to spend, and by accompanying customers on their journeys and adapting to their changing needs, retailers have seen a strong holiday season and You can stand in a suitable place after that.”

Australian Retailers Association CEO Paul Zahra said the Christmas quarter is the most important, with many stores accounting for up to two-thirds of their profits.

“As retailers gear up for one of the busiest times of the year, the mood is positive, but the severity of the cost of living problem and how it will impact consumer spending during the festive shopping season. I have questions about.

“Despite the uncertainty, retail sales have posted record growth in the first half of this year.

“Consumers have continued to spend in the face of rising interest rates and inflationary pressures, but there has been no direct impact on their spending.

“What is worrisome is that these factors will take time to wash over the economy, and we may see a tightening of the belt and a softening of sales heading into 2023.”

Zahra noted that discretionary purchases were cut first when households were under economic stress.

Heading into Christmas, he said labor shortages remained the biggest problem, with more than 40,000 job openings in retail.

“Many companies struggle to reach their full potential because they cannot have enough people to fill shifts,” he said.

“This means that Christmas casuals will be difficult to adopt as businesses are already struggling without high demand for the holiday season.”

The survey comes after the National Retail Association’s Consumer Sentiment Report revealed last week that Australians are cutting back on luxury goods and looking for bargains to combat rising inflation.

Nearly half of shoppers surveyed say they are confident in their pre-Christmas sales, and one in five plans to spend more than they did last year.

The data also revealed that 71% of consumers changed their spending behavior because of inflation.

“Consumers are feeling the effects of continued rate hikes and are acutely aware of the impact these inflationary pressures will have on their waist pockets,” the report read.

“This is driving a significant shift in consumer spending habits, with consumers reporting they will switch brands more often in 2022 than ever since the pandemic began.”

first published as Retailers ‘cautiously optimistic’ about Christmas shopping despite pressure on cost of living