Brighter Christmas expected for retail industry

RETAILERS could be looking at the best festive season in three years, a Deloitte Christmas Retailers' Survey to be released on Thursday will reveal.

The survey showed almost a third of retailers were expecting to discount their prices by early December, while retail trade growth was expected to come in at 3.7% for the year to December.

Deloitte partner David Rumbens wrote that the macroeconomic climate was likely to give the retail industry the best chance in three years to make some money this Christmas.

"It's hardly a perfect set of circumstances - jobs growth in Australia remains anaemic," he wrote.

"But interest rates have been slashed, wages growth is solid, house prices are stabilising, and consumer confidence has picked up.

"Consumers' appetite for spending has been stronger in 2012 than it has been for some time."

While Mr Rumbens wrote that he expected a brighter Christmas at the cash registers, retailers were likely to "return to a hard slog" next year, before a return to good returns around June.

"By financial year, real (inflation-adjusted) retail sales growth is expected to record solid growth of 2.9% in 2012-13, a step-up from recent years," he wrote.

"That may then moderate to 2.7% growth in 2013-14 as labour income growth is modest, before improving to 3.6% in 2014-15 as broader economic conditions and housing activity improve.

"Australian retail sector outcomes across the country are showing nearly as much diversity as the Eurozone at present."



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