As Westfarmers MD predict an “uptick in retail spending”, others are not so convinced.Wesfarmers MD spruiked the Christmas rush, predicting an “uptick” is nigh. However, not so, says Australian Food & Grocery Council, who today warned retailers may be in for a “challenging” trading period.
”I think the ingredients are there for an uptick in retail spending,” said Richard Goyder, Westfarmers MD at an earnings call, last week as the retail behemoth announced rise in group sales, including growth in Officeworks and Bunnings chains.
“I think the environment is just better now. When people are feeling financially better off that tends to reflect in spending habits. Christmas will be a good indication of that because that’s when people tend to be a bit more impulsive”.
However, Michael Dykes, Director of Move, the new Dick Smith backed “fashtronics” store, told Cn he’s expecting busy Christmas trading, and is “really pleased” with sales, profit and popularity of the product mix, to date.
However, not everyone is as enthusiastic as Dykes and Goyder.
The latest Australian Food & Grocery Council CHEP Retail Index suggests retailers may be in for a challenging Christmas, with retail sales growth slowing, with a turnaround not expected this year.
The Retail Index suggests ABS retail figures for September is likely to show 1.9% growth, on a turnover of $21.89 billion.
But growth will worsen in November and December – November turnover is forecast to drop to $21.85 billion, and growth slipping to 1.5%, with similar growth set for December, according to the Index.
AFGC CEO, Gary Dawson, says “retail sales growth is certainly underperforming against longer term trends, with the growth rate halving over the course of 2013. Retailers will be hoping the recent improvement in consumer confidence will assist sales growth this Christmas.”
ABS data over the past year shows varying performance within the retail sector with discretionary spending under pressure.