The holidays may be the most wonderful time of the year, but for small retailers, they’re also the most critical. As shoppers fill their carts with gifts, many small businesses are banking on those sales to stay afloat heading into an uncertain 2025.
Australian retail turnover increased by 0.6% in October 2024, according to seasonally adjusted figures released by the Australian Bureau of Statistics (ABS). This marks a stronger performance compared to the 0.1% rise in September and the 0.7% growth in August. Robert Ewing, head of business statistics at the ABS, attributed the boost to early discounting ahead of Black Friday. “Retailers reported increased sales activity in October, with some enticing buyers early, particularly with discretionary item discounts,” he said.
Zara Tonkin, Chief of Staff at Employment Hero: “Monthly retail turnover may have grown 0.6% in October to $36.7 billion but the numbers reveal deeper challenges. Consumers are prioritising essentials like food and household goods, while discretionary categories such as clothing and department stores lag. Household budgets remain under pressure, and cautious spending dominates the landscape, even ahead of Black Friday sales.
“Employment Hero’s October SmartMatch Employment Report (SMER) which uses real-time, verified payroll data from 1.1 million SMEs (not estimates) offers a more accurate and current picture of the economic pressures: Wages in the retail and hospitality sectors rose 0.7% month-on-month and 4.5% annually, outpacing annual turnover growth of 3.4%. Yet the average retail worker clocked just 97 hours last month—equivalent to losing a week of standard full-time work every month, likely due to shift reductions because of budget constraints. While employers are hiring—up 1.5% monthly, likely in anticipation of the end-of-year rush—total employment in the sector remains below last year, underscoring how precarious conditions are.
“Despite Black Friday sales offering consumers a chance to stretch their budgets, it’s likely many households were unable to fully participate. Retailers, especially SMEs, are feeling the squeeze. Rising costs of operating, and cautious consumer spending make profitability a challenge. We’re also really conscious of what the hours reduction means for retail staff: while serving others this season may likely face challenges affording the very bargains they help make possible.
“As the festive season approaches, businesses are banking on strong sales to bridge financial gaps. Without meaningful support, many small retailers could face significant challenges heading into 2025.”
Sector Highlights
Non-food industries led the growth, with other retailing up 1.6% and household goods retailing rising 1.4%, driven by strong sales of electrical goods such as televisions. However, clothing, footwear, and personal accessories dropped 0.6%, while department stores saw a slight decline of 0.3%. Food-related sectors posted gains: cafes, restaurants, and takeaway services rose 0.3%, marking a third consecutive monthly increase, and food retailing rebounded by 0.3%, led by a 1.7% rise in liquor sales.
State and Territory Performance
Retail turnover increased across most states, with the strongest growth in South Australia (+1.3%), Tasmania (+1.1%), and Victoria (+0.9%). The Northern Territory was the exception, recording a 0.5% decline. These figures reflect robust consumer activity, bolstered by strategic early-season discounts and continued demand in food services. The ABS acknowledged the vital role businesses play in providing data for such insights.
Here are some practical tips for SME owners to make the most of the holiday season and set themselves up for success in 2025:
1. Plan Ahead for Stock and Inventory
- Order Early: Ensure you have enough stock to meet demand, especially for popular items. Place orders well in advance to avoid supply chain disruptions.
- Offer Seasonal Products: Consider adding holiday-specific products or bundles that cater to gift-giving. This could help attract more customers.
- Inventory Management: Keep a close eye on inventory levels and avoid overstocking. Use data from previous years to predict trends and adjust accordingly.
2. Leverage Digital Marketing
- Social Media Campaigns: Utilize platforms like Instagram, Facebook, and TikTok to run targeted ads, promote special deals, or showcase your products in a festive light.
- Email Marketing: Send personalized offers to your customer base. Highlight holiday sales, promotions, and limited-time deals to drive traffic.
- Search Engine Optimization (SEO): Optimize your website for seasonal keywords to attract more traffic during peak shopping times. Ensure your website is mobile-friendly.
3. Create Special Offers and Discounts
- Flash Sales & Discounts: Offer time-sensitive deals to create urgency, such as daily deals or flash sales. This encourages customers to buy before the deal expires.
- Loyalty Programs: Offer incentives like extra discounts or gifts for repeat customers, which can encourage both immediate purchases and long-term loyalty.
- Gift Cards: Selling gift cards can provide immediate revenue while encouraging repeat business as customers return to redeem them.
4. Provide Exceptional Customer Service
- Staff Training: Ensure your team is ready to handle increased traffic and provide a high level of customer service. A great experience can result in repeat customers.
- Easy Returns and Exchanges: Make sure your return and exchange policies are clear and customer-friendly. This helps build trust, especially during the busy holiday season.
5. Optimize Your Online Presence
- Update Your Website: Make sure your website is updated with holiday hours, special promotions, and easy navigation for online shoppers. Consider offering free or discounted shipping.
- Utilize E-commerce Platforms: If you haven’t already, consider using online marketplaces like Amazon, Etsy, or local platforms to expand your reach and tap into a wider audience.
- Online Reviews: Encourage satisfied customers to leave positive reviews. Reviews can influence potential buyers and enhance your credibility.
6. Engage with Your Community
- Local Events and Sponsorships: Participate in local holiday markets or community events, which can provide exposure and help you connect with new customers.
- Collaborate with Other SMEs: Partner with other local businesses for cross-promotions. You can run joint sales, sponsor events together, or create bundled offerings that benefit both parties.
7. Prepare for Post-Holiday Season
- Prepare for Returns: Anticipate a higher volume of returns and exchanges after the holidays. Have a plan in place to manage this and keep customer satisfaction high.
- Post-Holiday Sales: Plan for January or “New Year” sales. Once the holiday season ends, you can continue to drive revenue by offering post-holiday deals to clear remaining stock.
8. Keep a Close Eye on Cash Flow
- Track Your Expenses: Stay on top of your finances and avoid overspending on holiday-related expenses. Proper budgeting can help avoid cash flow issues in the new year.
- Use Flexible Financing: If needed, consider short-term financing options like business credit cards or lines of credit to help manage any cash flow gaps.
9. Monitor Competitors and Trends
- Watch Your Competitors: Keep an eye on what your competitors are offering and adjust your strategy if necessary to remain competitive.
- Stay Flexible: Be ready to pivot if sales aren’t meeting expectations. This might mean offering last-minute deals or adjusting your marketing efforts to better appeal to customers.
10. Don’t Forget Self-Care
- Balance Your Time: The holiday season can be overwhelming, so be sure to delegate tasks and take time for yourself. A well-rested business owner is more productive and makes better decisions.
- Keep Perspective: Remember, the holidays are about building relationships with customers and creating positive experiences. Stay focused on long-term goals even during busy times.
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