CHRISTMAS PRICE WAR GOOD NEWS FOR CONSUMERS
SHOPPERS are tipped to receive some killer deals this Christmas with retailers predicted to slash prices to entice consumers to start spending again.
Surging power bills, low wage growth and a decline in discretionary income is forcing consumers to tighten their wallets, with business consultancy IBISWorld predicting frugal spending patterns from shoppers this Christmas season. The average Australian is tipped to spend just $420 on gifts this Christmas – a decline on last year’s numbers – with shopping centres and department stores all squabbling to provide better bargains to encourage people to spend.
Christmas has always been the period which can make or break a retail business, with IBISWorld’s report showing retail revenue surges 23 per cent from November to December. The report predicts that this crucial Christmas period will be characterised by more bargains, heavy discounting and fierce competition from online retailers, which will force shopping centres and department stores to adapt to maintain foot traffic within their locations.
“Shopping centres, big department stores such as Myer are really trying to diversify, and not just offer cheap prices where they can get their
margins squeezed quite a lot,” IBISWorld analyst Nathan Cloutman told the Gold Coast Bulletin.
“The other thing is to do more experience style things like food halls, such as David Jones, or bring a big celebrity in to spruik a new product like perfume or sportswear.”
The report shows these challenging trading conditions will remain for bricks and mortar retailers and service industries found in shopping centres, with revenue tipped to have an annualised growth of between one per cent to 2.2 per cent over the five years to 2023.
Over the same period online shopping is tipped to experience annualised revenue growth of 9.4 per cent, in a sign that low cost online retailers are really starting to hit their straps in the Australian market.
To draw in new customers IBISWorld believes shopping centres will start to expand their tenancy mixes.