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Christmas sales predictions not so festive for retailers

Retailers aren’t counting on joy to save the year, with Christmas sales projected to see only a small growth over last year’s figures.

The Australian Retailers Association (ARA) projected $39.5 billion in sales from mid November to 24 December 2011, just 2.2 percent higher than last year.

ARA executive director Russell Zimmerman said the prediction was even more important for key industries that rely on discretionary income.

Sales projections indicate that in comparison with the last festive trading period apparel and footwear sales could decrease 1.9 percent, department store sales are predicted to decrease 1.5 percent while industries such as household, food, hospitality and other retailing are set for a sales boost.

“Shoppers will more opt to spruce up the house and put on a family feast rather than put any more presents under the tree,” Zimmerman said.

On a state-by-state basis Western Australia is expected to have the best sales projection, with an 8 percent increase over last Christmas. The majority of Australian states will experience a small increase in sales except South Australia, which is predicted to see no change.

Industries that traditionally count the festive season as their biggest trading period are being warned to brace themselves for disappointing trade, after an ARA survey showed retailers are not anticipating a good Christmas trading season.

“Retailers who are usually optimistic about the festive period fear sales will be worse than last year,” Zimmerman said.

Results indicated that 74 percent of retailers believe shoppers are just looking for lower prices rather than customer service or convenience.

Shop owners welcomed the interest rate cut in November, and 65 percent of retailers think a further cut in December will boost sales.

Shauna O'Carroll

Shauna O'Carroll

Shauna is a second year Journalism and International Studies student at the University of Technology in Sydney. She has interned at various online and print publications and is now happily interning at Dynamic Business.

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