Stores still waiting for jingle tills rush

DEAN KOZANIC/The Press

SHO-HO-HOP: Retailers expect many people to hold off shopping this year until the final weekend before Christmas.

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A slow  build-up with a "ballistic" finish is the expectation of retailers for this year's Christmas shopping period.

Christmas Day falls on a Tuesday this year, which means that many people are likely to finish work on Friday and will still have three days in which to do their shopping. Retailers think this will encourage people to hold off on shopping till late.

"Our feeling is that there is going to be very much a last-minute dash. Probably more so this year than in previous years," New Zealand Retailers Association chief executive John Albertson said.

"If I was giving consumers advice I would say get out there and do your shopping now because our pick is it is going to go quite ballistic in that last weekend."

The festive shopping season comes amid increasing signs of a general slowdown in the retail sector, in line with a slowing economy. Statistics New Zealand said retail sales on a per-head-of-population basis were flat in the September quarter.

Though overall trading conditions are still being buoyed by virtually full employment, fuel prices are about 20 per cent higher than a year ago and mortgage interest rate rises - delayed for many people who were on fixed rates - are now starting to bite.

The publicly listed retailers have all to a greater or lesser degree recently issued cautionary statements about trading conditions.

Postie Plus chairman Peter van Rij told company shareholders at its annual meeting two weeks ago that it was "tough out there" and "success or failure depends on responsive action".

Postie Plus and Hallenstein Glasson have both warned that their first-half profits will fall short of the same figures a year ago, while Briscoe says full-year profits might be down about 15 per cent and The Warehouse has said this year's profit will not exceed last year's.

"It's a tough, slowing environment," Walker Capital Management principal Craig Brown said. "It will be a pretty tough lead-in to Christmas."

Briscoe managing director Rod Duke said his company, which runs the Rebel Sport and Briscoes Homeware chains, expected the Christmas period would be "okay" but trading was very patchy.

"There won't be any records this year. It has just come too late. It generally starts, if it is going to be really good, relatively strong from Labour Day. So you get a good run toward the end of October, November is pretty good and it is starting to wind up and then from the first days of December it is all gung-ho and it is going big time.

"That has not been the case this year and it hasn't been the case for the past two or three years. About three years ago we had a good run but that probably coincided with fixed interest rates of about 6 per cent to 6.5 per cent at the time, I think."

According to Paymark, which handles three-quarters of in-store electronic transactions in the country, transactions by volume were up 7.8 per cent in the first week of December compared with the same week last year.

In terms of dollars spent the amount, at $873 million, was $63 million higher than at the same time last year. Paymark is expecting to be handling over 100 transactions a second during peak Christmas trading.

Mr Albertson said though Christmas shopping had got off to a fairly slow start, the weather had so far been much better than at the same time last year.

Retailers were hopeful of increasing sales about 5 per cent this December compared with the same month last year.

That would take total retail sales excluding the automotive sector to above $5 billion for the month. Last December sales rose about 4.1 per cent month-on-month, but this was much slower than December 2005, when sales grew about 5.8 per cent from the previous December.

"What we are looking for this year is about another $200 million spend, which is only about $50 a head," he said.

- © Fairfax NZ News