Retail gloom recedes ahead of ChristmasOn 08/30/2019 by admin
Christmas bonuses from the Rudd Government\’s $10.
4 billion fiscal stimulus package, lower petrol prices and declining interest rates have sparked a return of consumer confidence ahead of Christmas, The Australian reports.
As major manufacturers warn that falls in the Australian dollar will translate to higher prices next year, retailers have welcomed a burst of spending as shoppers open their wallets to grab last-minute gifts.
Furniture and electrical chain Harvey Norman yesterday reported an 8.7 per cent increase in customer orders over the four weeks to December 21, compared with the same period a year earlier.
“It\’s quite amazing — we\’ve been down every week for months, and then we get three straight weeks in positive territory,” Harvey Norman executive chairman Gerry Harvey told The Australian.
Mr Harvey put the sales surge down to lower petrol prices and interest rates, the delivery of part of the Government\’s $10.4 billion in bonuses and first-home buyer grants, and “the euphoria of Christmas”.
Real test \’to come after Christmas\’
But the retailer, often seen as a barometer of discretionary spending, has warned that the “real test” for the economy will come after Christmas when shoppers come down from their spending binge.
Despite the biggest sales increase since September, Harvey Norman\’s profits are expected to be lower this financial year because of competition between retailers and an increase in the cost of importing goods due to the weak Australian dollar.
Department store group Myer also reported a significant increase in sales this week as school holidays began across the country.
The Australian Retailers Association has predicted shoppers will spend $6.32 billion at the post-Christmas sales this year, up just 2 per cent from last year.
Other retailers, including Coles and Woolworths, have declined to reveal their sales, saying that it is too early to tell how shoppers have spent the money.
Woolworths, which owns Big W, liquor stores and supermarkets, said early indications were that shoppers were spending “a proportion of the stimulus package in stores,” Fairfax reports.
The Coles-owned Target said customer foot-traffic was up on last year due to the stimulus package, interest rate cuts and petrol prices.
RELATED: Retail gloom recedes as shoppers lighten their wallets, The Australian