Australian retail sales are predicted to remain strong over the festive trading period, with consumers to continue spending in the face of cost-of-living challenges.

The forecast come from the most comprehensive Christmas insights ever released by the Australian Retailers Association (ARA) in collaboration with strategic partners Roy Morgan and Salesforce.

Australians are forecast to spend $63.9 billion in the pre-Christmas sales period (November 14 – December 24), which is up 3% on last year.

Pre-Christmas sales in the food category are predicted to be $24,793 million, up 1.8% on 2021. The food category includes supermarkets, grocery stores, liquor, and other specialised food retailing.

ARA CEO Paul Zahra said: “Retail sales are running at record levels at the moment, and our forecasts show sales will remain strong for the remainder of the year. There’s a delayed lag associated with rising interest rates and inflationary pressures, so there will inevitably be a softening of sales, but it appears that won’t occur until next year.

“While businesses are combating record levels of labour shortages and supply chain constraints, there’s still plenty to be optimistic about this Christmas. The Cyber Weekend sales are growing in popularity every year, and that’s set to provide retailers with good momentum for their festive trade.”

Hospitality businesses are also set to flourish in the run up to Christmas, with over $9 billion in trade – up 16.3% on 2021.

Roy Morgan CEO Michele Levine said: “Hospitality is a standout sector with forecast growth of 16.3% on a year ago to expected total spending of over $9 billion as Australians are set to enjoy the freedom of an Australian summer without any pandemic related restrictions crimping trade in the pre-Christmas period.”

Out of the states and territories, South Australia is set to record the biggest growth in sales on last year (up 6.6%), followed by the Northern Territory (up 6.5%). Consumers in NSW are forecast to spend nearly $20 billion in the pre-Christmas sales (up 3.1% on 2021), with Victorians to fork out $16.5 billion (up 0.8%) and Queenslanders $13.3 billion (up 4.6%).

Click here for the full breakdowns

According to Salesforce’s Holiday Insights Hub, which tracks holiday shopping and commerce trends from November – December, inflationary pressures and climbing interest rates will kick start holiday shopping earlier in Australia and New Zealand, with 33% of holiday sales forecast to occur in the first three weeks of November – before Cyber Week even begins. Salesforce also forecasts:

• 84% of sales will take place prior to the week of Christmas
• 25% of all the sales during the holiday period will take place during cyber week
• The average discount rate will be highest during Cyber Week, averaging 22%
• 70% of all traffic and 60% of all orders to occur on a mobile device during the holiday season

Jo Gaines, Area Vice President Retail and Consumer Goods, Salesforce said: “We know retailers are feeling the squeeze. To keep costs under control and boost sales, retailers need to look beyond tailoring communications to their customers and find ways to automate processes, remove friction and make it easier for consumers to purchase from them.”

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