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Retailers Seek Balance As Consumers Eye Pre-Christmas Price Cuts

Consumers shouldn’t expect increased price cuts in the lead up to Christmas, Commonwealth Bank research shows.

According to the Commonwealth Bank, 74 per cent of retailers won’t be changing their approach to sales this Christmas – at the same time, 46 per cent of customers expect larger discounts during the festive season.

“With three months to go until Christmas, retailers are holding fast to their usual festive season sales strategy,” Commonwealth Bank national manager retail Jerry Macey commented. “We are most likely to see initial discounts of 20 per cent, broadly in line with other sales throughout the year.

“Although many shoppers expect significant discounts prior to Christmas, retailers are seeking to strike a balance between offering some discounts and maintaining profit margins. They want and need to make the most of their busiest time of year.”

The research shows that ahead of Christmas, sales have already begun for 18 per cent of Australian retailers, with 34 per cent to start pre-Christmas sales before November, while 30 per cent of consumers begin Christmas shopping before November.

By early November, Christmas sales will have begun for 70 per cent of retailers, according to the Commonwealth Bank, which found that at this time 49 per cent of shoppers will have started their Christmas shopping.

“With sales ingrained in our psyche, price cuts are now expected by shoppers,” Macey observed. “However, savvy retailers understand their client base and have a defined strategy for sales throughout the year.

“This is also beneficial in the longer term for consumers, because they can continue to enjoy their favourite brands and shopping experiences when retailers operate healthy businesses.”

Post-Christmas, 71 per cent of shoppers expect even greater discounts from sales than offered throughout the rest of the year, seeing 48 per cent of shoppers delaying some or all of their purchasing until after Christmas.

Meanwhile, retailers plan to offer far greater discounts post-Christmas, with businesses in all categories, aside from food and beverage, planning a 50 per cent cut.

The research also shows that online-only retailers are generally starting their pre-Christmas sales earlier, with 44 per cent beginning before November, compared to 31 per cent in multi-channel.

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