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For the first time in three years retailers have an opportunity to make some money this Christmas.
That’s according to Deloitte who predicting a brighter Christmas for retailers after the last two years saw retail sales decline.

Consumers’ appetite for spending has been stronger in 2012 than it has been for some time, meaning more money coming through retailers tills.

“Interest rates have been slashed, wages growth is solid, house prices are stabilising, and consumer confidence has picked up” Deloitte said in a statement.

Retail trade growth to December 2012 is expected to be 3.7% in real (inflation adjusted) terms, and 4.4% in nominal terms.

Several major retailers Channel News has spoken to of late, have said consumer sentiment appears to be up and are expecting busy trading over the holidays.

Deloitte Christmas Retailers’ Survey, shows that almost a third of retailers are expecting to kick off discounting by early December, meaning tighter margin but this strategy will help increase cash flow.

The labour market is weak and real wages growth may moderate as inflation picks up over time, the survey predicts.
Interest rates are low and possibly heading lower while house prices are showing ‘signs of life.’

 

For retailers it’s all still a far cry from the pre-GFC days, but the macro reality is that income growth is modest and these days consumers are taking a more measured approach to borrowing and spending than they have in the past.

By financial year, real retail sales growth is expected to grow 2.9% in 2012-13, up from recent years.

However, this growth may fall to 2.7% in 2013 14 as wages growth remains moderate, but may improve to 3.6% in 2014-15 as economic conditions and housing activity improve, according to Deloitte.

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