Amazon Grinch bows to retailers

BRICKS-AND-MORTAR retailers have had a better-thanexpected Christmas as new competitor Amazon failed to ruin their festivities.

A Christmas review by a leading investment bank has concluded the retail sector posted a “solid” result for the most important trading period despite a gloomy November and early December.

“Try as he might the Grinch couldn’t steal Xmas – and neither could Amazon,” Deutsche Bank retail analyst Michael Simotas said.

The pre-Christmas launch of Amazon, a series of soft sales updates and the profit downgrade by Myer last month raised fears the retail sector faced its worst Christmas since the global financial crisis.

Mr Simotas said feedback from major retailers quizzed by Deutsche Bank in the new year found they had generally posted a stronger result than expected as consumers left their shopping late.

“Overall, the feedback was positive and in stark contrast to the weak conditions in late November, with almost every retailer we spoke to reporting solid sales growth over December,” Mr Simotas said.

“The trend across retailers was fairly consistent with a weak first week of December, a better second week and a strong final week before Christmas.”

The post-Christmas period had also exceeded most retailers’ expectations by a considerable margin, Mr Simotas said.

The Australian Retailers Association expects the nation to have shelled out more than $50 billion over the Christmas trading period. Some $20 billion of this will have been spent on food and drink.

The nation’s peak retailers’ association expects shoppers to spend another $17.9 billion in the post-Christmas sales period running from Boxing Day to the middle of this month.

December and January sales figures will not be finalised until February.

Mr Simotas said electronics and small appliances again were the most popular gifts as new products and strong discounts attracted shoppers.

Aggressive discounting by JB Hi-Fi appeared to have been supported by suppliers and planned to ensure the Australian retail giant had a strong response to the arrival of Amazon, Mr Simotas said.

JB Hi-Fi and Harvey Norman appeared to have been the best performers among listed retail stocks, he said.

The share prices of both companies fell heavily last year amid frenzied speculation they would suffer from the arrival of US online titan Amazon.

Specialty retail outperformed department stores, while David Jones appeared to have outperformed Myer “by a wide margin”, Mr Simotas said.