Despite high levels of pessimism among Australian consumers, David Wall has noticed a lot of people are buying board games and puzzles at his toy stores ahead of the Black Friday sales.
“We actually see pretty consistent sales as families are looking for ways to entertain themselves and they can’t afford to necessarily spend money at the movies, restaurants, or on UberEATS,” said Mr Wall, a director of HobbyCo, which operates six stores across Sydney.
Although the retail event is colloquially dubbed ‘Black Friday’ (and falls on November 24 this year), most stores have been starting their sales much earlier recently — sometimes as early as July.
Mr Wall said the July to September was a “really tough” period for the toy business as consumers grappled with cost-of-living pressures.
“At the moment we’re in that gift-giving season, so there is a slight lift as families are looking for an opportunity to provide gifts to each other and say, ‘hey, everything’s okay’.”
“But once we get into January, I think we’re really going to see a real challenge as it relates to consumer confidence and the way consumers are looking to buy moving forward.”
What started off as an American shopping tradition, has become a retail highlight around the world, with millions of Australians set to take part in the sales this year.
Data from the Australian Retailers Association (ARA), in partnership with Roy Morgan, shows that Black Friday and Cyber Monday sales are expected to account for more than a quarter of all holiday purchases this year.
It forecasts shoppers will spend $6.36 billion across the four-day Black Friday/Cyber Monday weekend (24-27 November). That’s 3 per cent (or $188 million) higher than last year.
ARA chief executive Paul Zahra says while cost of living pressures including higher interest rates could see more subdued pre-Christmas spending, Black Friday will give retailers a much-needed boost.
Westpac senior economist Matthew Hassan says while shoppers are likely to take advantage of sales over the Black Friday period, Christmas spending is expected to be weaker this year.
That’s because consumers are feeling “deeply pessimistic”, according to the results of the latest Westpac-Melbourne Institute consumer sentiment survey.
This widely-regarded economic data shows consumer sentiment fell 2.6 per cent to 79.9 points in November (down from 82 in October). Any score below 100 means the pessimists outweigh the optimists.
The Westpac survey showed that consumers worried about more interest rate rises and added that a softer Christmas spending period thereafter “is likely to take a little bit of the heat out of demand out of inflation”.
“Over 70 per cent expect interest rates to rise further over the next 12 months -that’s up from just over 60 per cent one month ago,” Mr Hassan said.
It would take time for inflation to come down within the RBA’s target band of 2 to 3 per cent, but he said “this austerity from consumers will help a little at the margin — it will encourage more retailers to discount and that’s likely to see more muted price inflation”.
(ABC)
