The 2009 ARA Christmas Retail Expectations Survey has revealed 56 per cent of retailers believed the past two interest rate cuts would decrease sales over the festive season.
Australian Retailers Association (ARA) executive director Russell Zimmerman said despite the damage from interest rate rises retailers were still cautiously optimistic about this Christmas with 63 per cent expecting sales to be the same or better than last year’s $37 billion Christmas spend.
"The number of retailers who are confident about Christmas trading is up 20 per cent on last year, reflecting stronger trading conditions throughout 2009,” he said.
"However, retailers are only teetering on the brink of recovery after severely reduced consumer demand in 2008. The news of two consecutive interest rate rises right before Christmas has waned their hopes of pushing retail recovery into full gear over the festive season.
"Retailers are saying it will be a good Christmas but it might have been a great one if the Reserve Bank hadn’t taken cash away from consumers at such a crucial time,” he said.
Despite the expected damage from rate rises, retailers are working hard to keep consumer spirits high in the lead up to Christmas with almost 37 per cent holding pre-Christmas sales to stimulate spend early.
"Retailers will be using window displays (70 per cent) and point of sale promotions (over 69 per cent) to grab the attention of shoppers,” said Zimmerman.
“They will also be investing in giveaways and competitions (over 29 per cent), print, television and radio advertisements (over 62 per cent), catalogues (42 per cent) and online or email promotions (over 35 per cent).”