NAB data confirms anecdotal reports that retailers are cancelling or scaling back orders.Consumers are increasingly taking advantage of sales to stretch the budget.
NAB chief economist Alan Oster says it’s the worst decline in retail forward orders outside the depths of the pandemic and the GFC, and indicates retailers are pessimistic about the months ahead. Traditionally, retailers start ordering Christmas stock sourced from overseas around March and domestically sourced stock around June and July. Stock starts reaching warehouses around August and September. October is usually the cut-off for orders for peak Christmas trade.“International orders would have been placed by now and a lot of that product would be on its way,” Zahra says.
According to PayPal research released this week, 66 per cent of Australian consumers are afraid of a potential recession, 52 per cent have reduced discretionary spend, 80 per cent are being financially cautious and 45 per cent have created a budget, scrutinising every dollar and spending more time deliberating on purchases.
According to data from Meta, 59 per cent of Australians purchased goods during the Black Friday/Cyber Monday sales last year, up from 48 per cent in 2021, and 43 per cent purchased during the Boxing Day sales .“Are consumers going to splurge to save, or will we see spending taper off?” Grujin asks. Walker estimates there could be $30 billion to $35 billion in stock nationally at retail value that is ageing or obsolete and will need to be marked down in time.