Christmas a mixed bag for retailers

Fashion retailers are struggling in the lead-up to Christmas, but restaurants and cafes are performing better than expected.

Statistics New Zealand retail figures for October showed the strongest spending growth was in cafes and restaurants, up 10 per cent on the previous month.

Overall retail spend was flat, with less than a 0.1 per cent increase from September.

Restaurant Association chairman Mike Egan said pre-recession surveys had shown people planned to cut back on dining out and limit spending on hospitality, but that had not happened.

"It's funny what people say they are going to do and what they actually do."

Corporates that had come through the past year were celebrating, unlike last December, Mr Egan said.

"They are still being cautious, but to shell out $50-$60 a head shouting the team out for dinner is not seen as extravagant.

"They are wanting to reward the teams for making it through the year."

Nicola Belsham, owner of wine store Wineseeker, said businesses wanted to thank their staff and key clients for riding out the tough times.

"It's coming from the heart," she said of the gifts ordered from her firm. However, in some retail categories Christmas is a last ditch grasp at bolstering depleted revenue in a dire year.

In October clothing and softgoods were down by nearly 7 per cent, the largest decrease of all categories. All automotive retailing had declined also declined from September.

Kirkcaldie & Stains chief financial officer Kerrie Cole said the Christmas rush was slow to start and the department store was opening early next week to accommodate early shoppers.

Retailers Association chairman Barry Hellberg said the forecast was for December to be 5 per cent up on last year, but there was likely to be a late run in the shops.

Still, there were better deals this year as shops had brought their sales forward, not typical for this time of year, he said.

Susan Wilson, owner of clothes and jewellery shop Marocka on Cuba St, was running a 70 per cent off sale to attract customers.

She admitted Christmas was a last gasp for some of the surviving retailers she had spoken to, yet so far business had been "bloody terrible". Numbers were down, but the spend was lower again with shoppers watching what they bought, controlling impulse buying and asking for deals.

"There's a lot of `Is that the best price you can give me?'," she said.

With the worst annual sales since opening in 2006, Ms Wilson hoped Christmas was going to be enough of a kicker to get her through the holiday.

"But we haven't been saved yet."

- © Fairfax NZ News