Happy days for retailers this Christmas?

It seems not many retailers are looking forward to Christmas this year, with only 42 per cent expecting growth over two per cent, compared to 54 per cent in 2016.

While 70 per cent of retailers still expect Christmas 2017 sales to exceed last year’s, according to the 2017 Deloitte Retailers’ Christmas Survey, this is down from 76 per cent in 2016.

David White, national leader of Deloitte’s Retail, Wholesale & Distribution Group, says despite the relatively stable economic environment and consumer spending throughout the year, the competition for share of wallet has been intense.

“A number of retailers haven’t survived the year and there is a concern amongst respondents that weakness may continue throughout Christmas 2017,” he says.

The number of retailers expecting online sales above six per cent has increased from 36 to 52 per cent, with 31 per cent believing their online sales will be more that 10 per cent of their total sales for the period.

“There is an ever increasing sales proportion made up of online. The relationship between bricks-and-mortar operators and online is an ever strengthening one as the value of an effective digital strategy continues to bear fruit for traditional retailers. Retailers are getting it―over 80 per cent of respondents consider an effective digital strategy to be critical or very important to the performance of their businesses.

“We see the market waking up to the digital tipping point, where digital becomes not just a complementary sales channel, but the core of the experience. Retailers are embracing true omnichannel, with the reinvention of the store experience, consolidation of store networks and shifting of large portions of sales onto digital storefronts.”

However, retailers are not giving up on bricks and mortar, in fact, 43 per cent of respondents believe new stores will drives sales growth in 2018, followed by new products (24 per cent) and online offerings (15 per cent).

“Undoubtedly, the fight for market share looks set to be fiercer than ever. The process for some may be painful, and we expect to see further consolidation throughout the year, but for those retailers that get the model right there is a big prize in store.

“The recent increase in the Australian dollar will flow through into price deflation if levels remain elevated, requiring volume growth and new stores to drive sales.”

By Marion Gerritsen