Research shows consumer confidence down for Christmas
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Retailers including Myer are bracing for a slow Christmas period. (abc: Liz Hobday)
The lead-up to Christmas is usually the peak period for retailers but a recent survey of shoppers suggests this year will not be as busy as usual.
Despite the Federal Government's $10 billion economic stimulus package, more than a third of people surveyed say they have already cut back retail spending because of the tough economic times.
This new trend is forcing retailers to rethink their marketing methods.
In previous years the majority of retailers maintained the full price on most of their products right up until Christmas, with shrewd shoppers waiting until the Boxing Day sales to bag a bargain.
But this season many of the major retailers are already marking down stock.
Myer's Mitch Catlin says that prices are set to stay low over Christmas.
"There's no doubt that you will see significant discounting in the lead-up to Christmas, probably more than you have in recent years and probably even greater discounts again when the boxing day sales start," he said.
"I think one of the strategies we've implemented what we've called door buster specials which have been in all of our stores where four or five specials each day are available for one day only."
This kind of retailer behaviour is a sign of how worried many retailers are about Australia's economic outlook.
New research from RightNow Technologies shows their concerns may be well founded.
Researcher Neil Stollznow says the findings indicate nearly two-thirds of the adult population will be spending less over Christmas.
"We asked them [shoppers] what they were thinking about their Christmas shopping behaviour," he said.
"The interesting thing is only 27 per cent said they were going to buy the same number of Christmas presents with the same value as in previous years.
"The rest, which is almost two-thirds of the adult population of the country are going to either buy the same number of presents but spend less per person or they'll try and buy fewer Christmas presents.
"19 per cent have [already] decreased spending in online retail and 31 per cent have decreased spending in shops and 35 per cent have decreased both online and in retail stores."
While the figures paint a grim picture, Mr Stollznow says there is a chance the negative sentiment is overstated.
"One of the limitations about asking people what they think they might do in the future is that we don't really know," he said.
He says the best retailers can do is wait and see how the Christmas period turns out.
"The thing that's... quite frightening out of this survey is that there is a clear lack of consumer confidence in the future," he said.
"The level that negative spend will be happening around Christmas when people are standing in the shop with cash in their hands is going to be a litmus test of how the rest of the year will shape up.
"Right now in November 2008, people are very, very apprehensive about the future and that's showing in these figures."
Mitch Catlin is less pessimistic, saying the Spring Racing Carnival delivered Myer a bump in sales that he hopes will build some momentum for Christmas.
"You ask any retailer in the country and they'll probably tell you the same thing, that it's really very difficult to gauge where things will go," he said.
"Obviously we'd be very supportive of a decrease in interest rates and I think what has also helped is certainly the fall in petrol prices.
"We remain hopeful as does any retailer in the country that [this] Christmas... will be a slightly improved one."
Adapted from a report by Ashley Hall for The World Today
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