ANZ analysts point out that the Christmas shopping season in Australia is an important time for retail, representing 12% of total non-food turnover for the year, but this Christmas Effect used to be stronger, particularly in discretionary, non-food categories.
Key Quotes
“There has been a clear downward trend over time.”
“The growth of online retail and, in particular, heavy discounting coming into the Christmas season may be behind the weakening effect, which has seen a particular downward trend in the last 10-12 years.”
“We expect an eventual stabilisation of the Christmas Effect for non-food; but, considering the rising intensity of competition for the Christmas dollar, that stabilisation isn’t expected in the short term.”
“High household debt levels and higher non-retail expenses (housing, utilities, education and health) may also squeeze households’ ability to spend up at Christmas. This is a structural change in spending that we expect to persist.”
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