Better deals on the cards for shoppers as retailers shuffle stock

Sanja and Stephen Muddyman had their eyes peeled for bargains when they took their three children to Melbourne’s Chadstone Shopping Centre on Friday, with Sanja saying value is top of mind as every day costs like grocery and utility bills jump.

“We’ve got a young family, it’s always a big factor – you’re always looking at where you can save,” she said.

The family doesn’t spend as much at the Boxing Day sales as during the lead-up to Christmas, but they will still be on the lookout for deals for future birthday gifts and back-to-school essentials.

Retailers have come to the table with good offers so far, she said. “A lot of retailers took the opportunity to increase their sales and pull in the customers. That has definitely helped.”

Commonwealth Bank’s group executive of business banking, Mike Vacy-Lyle, said there had already been discounting as retailers look to clear excess stock, and the deals are likely to keep coming into next year.

“There probably will be a lot more as we get later into December. So, I think you could probably expect some pretty good sales in the first quarter of 2023,” he said.

Meanwhile, experts have been working hard to pinpoint the exact moment that rising interest rates and inflation will curb Australians’ appetite for spending.

Australian Retailers’ Association boss Paul Zahra says the sector is optimistic about trading in the lead-up to Christmas, when shoppers are expected to fork out $63.9 billion.

But he acknowledges that inflation is playing a role in driving up revenues for retailers. “We haven’t yet seen the forecast inflationary peak, and we anticipate a softening of sales in 2023,” he said.

Early sales data from some platforms suggests that while more shoppers overall opened their wallets in November, spending on an individual level might not be as impressive as has been touted.

Loading

Data from shipping software platform Shippit across 800,000 transactions suggests Australians made 27 per cent more orders over the sales weekend than last year, but shoppers spent almost an identical amount compared with 2021.

“The average order in 2022 was $153.13, compared to $153.07 in 2021,” the group said.

While clothing orders jumped 10 per cent for the year, other categories slumped. “Losers include Fashion Accessories as well as Cosmetics and Toiletries, which both lost approximately 40% of their order volume from 2021 to 2022,” Shippit said in its report on the event.

Topline inflation slowed in October to sit at 6.9 per cent, but while the price of everyday essentials like fruit and vegetables are moderating, other core costs like housing are still climbing. Housing inflation was at 10.5 per cent for the year to October, while rental inflation was at 3.5 per cent.

Retail trade data for the month also served as a reminder that spending is not on an endlessly upwards trajectory, with turnover falling by 0.2 per cent month-on-month, the first drop this year.

Clothing, footwear and department store retail saw the biggest declines for the month after a strong period earlier in the year.

This feeds into analyst expectations of a “spending cliff” hitting early next year – with some predicting spending is moderating already, three weeks out from Christmas.

“We expect spending to moderate further through December, with footfall now normalising
[after spikes when retail reopened] and cost-of-living pressures starting to hit,” Jarden analysts told their clients this week.