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Media Release

Christmas sales period won’t bring extra price cuts for shoppers

No extra price cuts for shoppers this Christmas

Consumers seek further discounts while retailers balance profit health

As some Aussies start to prepare their gift lists, new research shows shoppers won’t see increased price cuts in the lead up to Christmas. 

Commonwealth Bank has found 74 per cent of retailers won’t be changing their approach to sales this Christmas, even though about half (46 per cent) of their customers expect larger discounts during the festive season. 

Commonwealth Bank’s National Manager Retail, Jerry Macey, said: "With three months to go until Christmas, retailers are holding fast to their usual festive season sales strategy. We are most likely to see initial discounts of 20 per cent, broadly in line with other sales throughout the year. 

“Although many shoppers expect significant discounts prior to Christmas, retailers are seeking to strike a balance between offering some discounts and maintaining profit margins. They want and need to make the most of their busiest time of year.”

Christmas sales have already begun for 18 per cent of Australian retailers, and by early November this will have risen to 70 per cent. At this time almost one in two (49 per cent) shoppers will have started their Christmas shopping and almost 70 per cent of shoppers said they will buy something for themselves during the Christmas period.

“With sales ingrained in our psyche, price cuts are now expected by shoppers. However, savvy retailers understand their client base and have a defined strategy for sales throughout the year. 

“This is also beneficial in the longer-term for consumers, because they can continue to enjoy their favourite brands and shopping experiences when retailers operate healthy businesses,” said Mr Macey.

When looking at post-Christmas sales, there is a sharp increase in the number of shoppers (71 per cent) expecting even greater discounts than offered throughout the rest of the year. As a result, almost one in two shoppers (48 per cent) are delaying some or all of their purchasing until after Christmas to access better deals. This is most prominent in the clothing and footwear category (53 per cent).

Retailers are also planning to offer far greater discounts post-Christmas, with businesses in all categories other than food and beverage planning a 50 per cent cut.

“Of course, not everyone celebrates Christmas – and whether they do or not, waiting for a deeper discount is a well-established consumer trend since the advent of the Boxing Day sale. Smart retailers will have a clear strategy for post-Christmas sales that works for them and their customer base,” said Mr Macey.

Key data points

What shoppers are looking for this Christmas
• 46% are expecting greater discounts in pre-Christmas sales than at other times of the year;
• 30% begin Christmas shopping before November;
• 69% are planning to buy some items for themselves;
• 71% expect a higher discount in post-Christmas sales; and
• 48% are delaying at least some shopping until post-Christmas to obtain greater discounts.

The planned approach for retailers
• 74% of retailers who run pre-Christmas sales promotions are not changing their approach this year, compared to other Christmas periods;
• 34% start pre-Christmas sales before November;
• Online-only retailers tend to start their pre-Christmas sales earlier (44% begin before November, compared to 31% in multi-channel);
• Most retailers (the median surveyed) plan a 20% discount for pre-Christmas sales, similar to other sales throughout the year; and
• Retailers in all categories (aside from food and beverage) are planning discounts of 50% post-Christmas.

About the Retail Insights Report 

The data shown above comes from a preview of the Commonwealth Bank Retail Insights Report edition three, due out in October. 

The report is based on a quantitative survey conducted by ACA research in August of 500 senior retail business decision makers from small, medium and large retail businesses. The report also includes a survey of 1,001 shoppers.