Christmas cheer for food retailers

Posted by Isobel Drake on 10th December 2009

Retail industry body the Australian Retailers Association (ARA) said that after a year of patchy growth, retailers were optimistic of a ‘fair’ 2009 Christmas period with an expected year-on-year growth of 4.7 per cent, totalling $38.7 billion moving through the economy via retail sales. The largest spend is once again expected to be at food retailers, with forecasts for sales growth of 4.7% on last year despite low inflation.

ARA Executive Director Russell Zimmerman said the current retail cycle was not what it was last year with a previous total spend of $36.95 billion (an increase of only 2% from 2007). He added that 2009 is an improvement, but remains challenging as 72 per cent of retailers found last week’s trading met or was below expectations.

“Although last week’s trading did not rise above expectations for most retailers, 65 per cent said last week’s trading was similar to or better than this time last year. The fact that retailers are expecting better sales than last year but are not yet meeting their targets shows there is optimism, although a significant portion of retailers are still hampered by patchy trade,” he said.

According to ARA modelling and research among retailers, food sales are forecast to reach $15.47 billion over the Christmas period, up from $14.78 billion last year.

“From our research, we constantly come across a type of consumer – a conservative, thrifty and wary consumer keen on making their dollar really stretch across lower end and reduced priced products,” Mr Zimmerman advised. “Over the Christmas season, retailers will experience fair trade but it will be below their expectations.”