SYDNEY–Australian retailers reported a bumper start to traditional post-Christmas sales on Sunday, as thousands of consumers spooked by interest rate hikes went out in search of a bargain. Hundreds of keen shoppers queued outside the nation’s major department stores for special pre-dawn opening hours, lured by massive markdowns on white goods, electricals and clothing.
Retailers are promising the best discounts in years after sluggish Christmas trade was hit by a series of interest rate hikes that left consumers reluctant to spend.
“What we are hearing from retailers all over the country is that it’s been a bumper start to the Boxing Day sales this morning,” said Australian National Retailers’ Association chief Margy Osmond. Young consumers were leading the charge, with 7 percent of people aged between 20 and 30 saying they had held off on buying Christmas gifts until the sales period, added Osmond. “What we’re hearing is that Generation Y has finally come out of hiding and after a year of doing not very much shopping they’ve been saving up for the sales,” she said. Retailers are hoping to book around 7 billion Australian dollars (US$7 billion) in the post-Christmas sales after seven rate hikes by the central bank — the last in November to 4.75 percent — left mortgage-laden consumers reluctant to splurge on gifts. Major stores are also battling a rush to online shopping following the Australian dollar’s prolonged rally, making offshore spending better value for money. “What we are seeing now is Australian consumers becoming unbelievably cautious about the way they spend,” said Osmond. Retailers traditionally make 40 percent of their profits in the weeks before Christmas and about 65 percent of sellers experienced worse conditions in the key period than last year. Many stores opted to start their post-Christmas sales early in a bid to draw customers, with some slashing prices by as much as 70 percent, prompting some to question whether consumers would be underwhelmed by the fresh bargains. But early signs were good for the stocktake sales, which run into January.
“People are still queuing to get on the escalator on the ground floor and it’s almost 1 p.m.,” said a spokesman for the Queensland branch of Myer, Australia’s largest department store. Shoes, handbags and clothes were the best-selling items, and Osmond said the western city of Perth, at the frontier of the economy’s massive mining boom, would spend up biggest. The latest figures showed a 1.1 percent slump in retail turnover in October, following flat trade the previous month, with cafes and restaurants, and the clothing and footwear sectors suffering the worst falls.