Retailers buoyed by Christmas forecasts
RETAILERS are predicting their strongest Christmas period ever, with customers expected to splash out $50 billion during the festive season.
Online sales have been forecast to surge, with four out of five retailers anticipating a stronger Christmas trading period than last year, according to a retail survey released by Deloitte today.
National leader of Deloitte’s retail, wholesale and distri- bution group David White said the findings showed retailers were broadly optimistic heading into the crucial spending time.
“The overall market has performed relatively well in 2018 and, in spite of competitive and economic challenges, they appear to be carrying this optimism forward into the Christmas trading period,” he said. “Discounting will remain an important Christmas sale strategy, with more than 60 per cent of retailers planning to discount, and a further 21 per cent still to make a call on this front.”
The National Retail Association (NRA) has forecast Queenslanders will spend $9.6 billion during the trading period, which includes the second half of November, and all of December, this year, up from $9.24 billion in 2017.
Mr White said retailers were banking on an uptick in online sales to drive spending growth, with more retailers investing in omni-channel services to cater to consumer habits.
“This year, it appears they are looking to reap some reward from these investments, and online is set to be a key sector battlefield this Christmas,” Mr White said.
Most major retailers have begun their festive season trading blitz, with David Jones and Myer already releasing gifting catalogues.
Shopping events including this week’s Click Frenzy and next week’s Black Friday, changing where many retailers offer online discounts, were also forecast to give retailers a sales boost in the peak time.
NRA chief executive Dominique Lamb predicted shoppers would spend more than $50 billion with retailers during the Christmas trade period – a record amount.
“A strong sales performance during the festive season can provide a generous windfall that can also help smaller businesses navigate quieter periods of the year,” she said. SEVEN West Media is increasing its target for cost cuts as it prepares for a flat advertising market for metropolitan free-to-air TV this financial year.
But the broadcaster and publishing group has reiterated its earnings forecast, saying it expects to increase its share of the market.
Seven chief Tim Worner told shareholders at the group’s annual meeting yesterday it now expected net cost savings of $20 million to $30 million for the year to next June.
That compares with its previous target of $10 million to $20 million.
“Overall we expect the metro TV ad market to be broadly flat in the financial year, but for Seven to increase share,” Mr Worner said in his speech.
Fuelled by the group’s cricket broadcast rights, Seven expected its metro free-to-air revenue share to grow this quarter, and this half, he said.
“The market performance in the second half is expected to be stronger driven by increased ad spend from a number of sectors including election money,” he said. The next federal election is due by May.
Mr Worner also reiterated the group’s forecast for growth in earnings before interest and tax of 5 to 10 per cent on an underlying basis, which excludes one-off items.
The company would continue to cut its debt pile, he told shareholders. Seven shares rallied on the commentary, closing up 2.1 per cent at 74c.
In April, Seven – in a partnership with Foxtel – prised Cricket Australia’s media rights away from rival Nine.