Aussies will get more for less this Christmas

We are now firmly into the Christmas holiday and gift giving season. Billboards, giant Santas, Christmas decorations, websites, catalogues and heaps of Christmas stock is now starting to flow into stores. This is always a thoroughly exciting, stressful and challenging part of the year for everybody who works in and around retail.

So what are we seeing out there at the moment?

Well before we look at what’s happening in stores, let’s look at how we as shoppers are behaving and how we are spending our money.

When it comes to the big ticket items we are seeing more people attending auctions and buying new cars. In fact, down the eastern seaboard, all three states are showing signs of confidence. Around the country our desire to take international holidays is growing every month, with a 10% increase in outbound overseas travel. I have a friend who runs a boutique cruise line and they have doubled capacity this year and sold out cruises going forward.

So all in all, while the ABS statistics still point to us saving money in order to be able to fund these large purchases, we must be earning more. It could also be the fact that interest rates and fuel costs have since dropped. No matter what the factors, the important thing is, we are spending.

At wholesale ordering level, it’s still patchy. Retailers buying offices that have committed to overseas orders of seasonal lines are taking them in, but orders on local distributors are still cautious and very targeted. While a distributor last year would have received orders across a broad range of categories they supply, retailers are surgically choosing to put their “open to buy dollars” into weight of stock on floor for items they know will sell, but lightening order quantities on items that are trending flat or down.

At store level in Australia, the buzz is building but hasn’t yet built. Strong point of sale and great displays are highlighting prices that are lower than this time 12 months ago across almost every category, from food to clothing through to electronics and telco plans. In fact, prices are much lower in electronics as we see international price drops feeding through into the Australian market. For the first time in many years, Australians will spend less and get more this Christmas than ever before.

In the US, there is a real sense that this is going to be a much, much better holiday season than 2010. The week of November 12, 2011 sales were up 3.1% compared with the same week in the previous year. Although retailer lead discounting to create footfall into stores is evident, it’s no deeper or wider than last year.

In the UK, sales are up at benchmark ASDA by 1.3% in Q3 to the end of September, and on the back of lower prices at shelf. In the UK shoppers will also be paying less on average than they did in 2011 as Consumer Price Inflation (CPI) has dropped 0.2% as a result of lowering prices for items across retail.

But according to the global online retailer Amazon, Monday December 5 will be its busiest day for online shopping in the run-up to Christmas 2011. That day is forecast to be the peak traffic day for online shoppers buying for themselves or as a means of purchasing, gift wrapping and sending gifts to loved ones.

As I walk stores in Australia and New Zealand over the coming weeks, I will be interested to see how our desire to spend on the big stuff translates into our Christmas break.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.