Bring it on, say retailers awaiting buying frenzy

RETAILERS ARE hoping for four days of Christmas shopping frenzy as new figures reveal people are spending less than usual this festive season.

But even if shoppers come out in force ahead of Christmas Day, Boxing Day is set to be a bargain bonanza as nervous retailers look to slash prices to entice customers before the economic recession worsens.

Sales have started early this year but they have so far failed to have much impact on the amount being spent. By the close of trading on Friday, spending through the Paymark network which handles three-quarters of all in-store transactions had hit $2.49 billion for the month, an increase on the first 19 days of last December of just 3.2%. Over the last five years sales climbed 8-10% each December.

Wet weather around much of the country yesterday saw people flocking to malls, and spending could surge in the next few days, a traditional occurrence when Christmas Day falls on a Thursday.

However, retail analysts say that the Boxing Day sales are where people could get some great bargains and it is the time to beat the expected New Year price surge for big-ticket items.

The New Zealand dollar has fallen from around US80c to just over US50c since April, meaning imported goods such as plasma TVs, washing machines and fridges could jump in price by as much as 50%. That means a low-end plasma TV, currently selling for around $1400, could increase to almost $2000; an $800 dishwasher could jump to more than $1100.

Retail analyst Tim Morris, of Coriolis Research, told the Sunday Star-Times the last seven days of the year will be the final chance for consumers and retailers to do well in the face of a worsening economy and the falling dollar.

But Morris warned that not all Boxing Day bargain-hunters will find what they're looking for. He said retailers are carrying less stock than usual because of warnings about tougher economic times.

Although times are getting tougher for retailers, the pain isn't evenly spread. Morris said the effects of the New Zealand recession and global financial crisis are hitting hardest in urban areas and in the north of the country.

"Across all retail, the south is doing better and the more rural areas," said Morris, adding that urban professionals, whose jobs were more likely to be tightly linked to finance and trade, were feeling the pinch most and cutting back on spending.

Retail sales have been flat or falling for most of 2008. Before this decline, monthly retail figures had been going up ever since May 1998.  

- © Fairfax NZ News