Retailers cut stock, brace for leaner Christmas
Retailers have substantially cut back the amount of stock they are ordering as they brace for a subdued pre-Christmas selling season, in the latest sign households are reining in their spending to cope with cost-of-living pressures and a sharp rise in mortgage repayments.
With little prospect of interest rates falling until mid-2024, retail chains are being careful to avoid being stuck with too much inventory in warehouses and stores. Gerry Harvey, the executive chairman of electricals and furniture retailer Harvey Norman, said the cost-of-living pressures were at their most intense in metropolitan stores and mortgage-belt suburbs.
Retailers are facing a tougher pre-Christmas season and have trimmed back order levels in readiness.
His chain had dialled back ordering to about 90 per cent of the usual order volumes for this time of year, when stores stock up ahead of Black Friday sales in November and Christmas. “It is 90 per cent of normal,” he said.
“It is going to be harder than it has in the past,” he said.
Mr Harvey said shoppers were more subdued, but retailers were also grappling with higher costs of doing business. “The big ones are wages and power bills,” he said.
After last year’s first non-disrupted Christmas since COVID-19 hit, this year’s Christmas is set to feel the full force of the post-pandemic inflation breakout and the cost-of-living squeeze.
Figures from the Australian Bureau of Statistics confirm households have been cutting back on spending, as a rise in mortgage repayments and income tax compound the cost-of-living pressures caused by high inflation.
Petrol prices were also adding to the pain, increasing 5.4 per cent in the September quarter-to-date to a national average of 189.6¢, according to the
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