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As retailers look beyond lockdowns to the all-important Christmas trading period, Deloitte’s annual Retailers’ Christmas Survey 2020 shows signs of optimism, the business consultancy says.
According to the survey, the percentage of retailers expecting more than 5% growth this year has nearly doubled since last year.
This, says Deloitte, illustrates that whilst retail spending will likely be lower in 2020, many businesses are seeing high demand for their products as consumers spend more time at home – with the share of wallet for retailers shifting accordingly.
But the researchers warn that there is strong polarisation in growth expectations. While 39% of retailers expect Christmas sales to exceed 2019 by more than 5%, there are a contrasting 24% of businesses who expect sales to decline by more than 5%.
Online is anticipated to have more potential, with 71% of retailers expecting online sales during Christmas to exceed the same period last year. Nearly half of all retailers think that online sales will account for more than 10% of their total sales.
“Despite the optimism for some, the survey shows a two-speed retail highway, with some retailers in the fast lane and others seemingly stuck in first [gear],” Deloitte says.
“For the first time in the survey’s history, more respondents expect either plus or minus 5% Christmas sales growth compared to last year. [In 2019] none expected a 5% or more decline.”
Deloitte executive David White believes the survey reflects the uneven impact of the pandemic on Australian retailers.
Some have benefited from border closures and consumers spending more time at home, whereas others in the services, apparel and catered food market have borne the brunt of the downturn.
“The polarisation of the market means that there is not just one narrative around COVID-19, but many,” White says.
He noted that nearly three-quarters of respondents said JobKeeper helped avoid redundancies during the pandemic.
“Many of the 1.25-million Australians who were employed at the start of the year were stood down during the pandemic due to the closing of stores. JobKeeper has not only supported retail employees across Australia but provided those employees with money to spend in the economy during the hardest-hit period,” White stated.