More Australian shoppers will flock to the biggest retail stores this fortnight as consumers prepare for the festive season.
According to Australian National Retailers Association (ANRA), $7 billion will be spent at retailers this week, followed by an expected $9 billion next week. West Australian's will spend the most this Christmas, with the average per person spend expected to reach $356.
The most sought-after presents this Christmas will be gift cards, which are both easy to find and convenient. "They've gone from being just a little bit daggy to being the most desired gift so people can use them in those post-Christmas sales," ANRA CEO Margy Osmond told reporters.
Of the $7 billion to be spent this week, $5.5 billion will be spent in store whilst the remaining $1.5 billion will be spent on their websites. From now on ANRA expects there to be lesser amounts of foreign online purchases as many consumers believe gifts may not be delivered in time for Christmas.
Christmas sales will be 5% higher this year and will be welcomed by many struggling retail stores who haven't been able to compete with foreign outlets whilst the dollar was so high.
With lower interest rates on offer this Christmas and consumer confidence rising, businesses will be hoping to overcome a year of patchy sales and post strong gains. Retailers who can couple an enticing and reliable website with in store service will likely benefit from more traffic. Super Retail Group (ASX: SUL), Harvey Norman (ASX: HVN), JB Hi-Fi (ASX: JBH), Myer (ASX: MYR) and David Jones (ASX: DJS) are just a handful of companies that will be extra busy this time of year.
Foolish takeaway
Investors looking to take advantage of the cyclical trading period should consider both the current price of the company's stock and the likely effects of increased trading activity. At current prices, Myer appears to be the cheapest and its new online store is growing quickly.
