Australian retailers are preparing for a surge in sales during the festive season, with projections indicating a $69.7 billion boost in retail spending leading up to Christmas. This represents a 2.7% increase compared to the previous year.
The Australian Retailers Association (ARA) has commissioned research that forecasts a record $6.7 billion will be spent during the four-day shopping period from November 29 to December 2, marking a 5.5% rise from the previous year. Consumer spending is expected to average $707 per person, reflecting a $61 increase from the previous year.
The Westpac-Melbourne Institute Consumer Sentiment Index has recorded a 5.3% increase, reaching a reading of 94.6, indicating positive consumer sentiment. The S&P/ASX 200 Consumer Discretionary Index, which includes 23 listed companies, has shown impressive performance, rising nearly 20% year-to-date and 27% over the past year. Premier Investments has seen its shares increase by almost 22% year-to-date and over 40% in the past year.
However, analysts have mixed views on specific stocks, with Citi downgrading its rating for Premier Investments and recommending holding shares of JB Hi-Fi. Morgan Stanley has adopted an underweight stance on the discretionary sector, favoring consumer staples. Harvey Norman"s shares are trending downward, while Breville Group faces potential challenges due to tariffs imposed on Chinese imports. Wesfarmers has experienced a 20% rally in its shares year-to-date, but market sentiment appears weak.