Tens of thousands of Australian shoppers hit department stores yesterday for the annual Boxing Day sales, with ailing retailers hoping to ring up A$1.7 billion (US$1.73 billion) in purchases.
Australia’s resources-driven economy is not in recession and boasts low unemployment, but with uncertainty growing Australians have become much more conservative consumers, saving at a rate not seen for 20 years.
After a dismal year in retail and a disappointing lead-up to Christmas, in which cold and rainy weather hurt summer fashion turnover, storekeepers were hoping from a boost from the traditional bargain sales.
“We’re anticipating that the spend today alone will be somewhere in the vicinity of [A]$1.7 billion,” Australian National Retailers Association chief executive Margy Osmond told ABC TV.
Over the week, consumers are expected to spend A$5.5 billion, she said.
Hundreds of people waited in pre-dawn darkness outside David Jones and Myer department stores in Melbourne and Sydney, which opened at 5am yesterday, while shopping precincts were swarming with crowds hunting for bargains.
Australians failed to spend big in last month and this month, despite interest rate cuts in those months bringing relief to mortgage holders, while the high Aussie dollar has also hurt retailers.
However, shoppers yesterday snapped up electrical items, homewares and new clothes, and younger consumers hunted for heavily discounted designer fashion items.
Retailers view Boxing Day sales as an important indicator of the coming year and David Jones chief executive Paul Zahra, said early indications were that the sales had brought out as many people as last year.
“It’s pleasing given the tough start to the retail sector this season,” he said.
However, “We can’t mislead ourselves. This is not necessarily going to be enough to spell any kind of recovery for the retail sector who will be moving into their most difficult time of the year, which is the first quarter,” Osmond said
In September, top-end department store David Jones reported full-year net profits dropped 1.5 percent and warned of difficult conditions amid the retail slump.