CAUTIOUS optimism is emerging about the prospect of an upswing in the Warrnambool retail industry, Commerce Warrnambool president Richard Montgomery says.
Mr Montgomery said stronger-than-expected national retail sales figures for the June quarter were good news and he expected Warrnambool shared in that positive trend.
Warrnambool retailers had been less pessimistic recently about their future sales than they had been in previous quarters, he said.
He hoped the “momentum” that had lifted national sales figures for the June quarter carried through into the Christmas period.
But retailers needed to confront online buying that had become a permanent part of consumer habits.
“The global market is now impacting on the local market,” Mr Montgomery said.
“There will be a fair bit of competition in the marketplace with heavy discounting.
“If retailers are well prepared, they will enjoy a strong period leading up to Christmas,” Mr Montgomery said.
Dun & Bradstreet, a leading source of commercial information on sales and marketing, said stronger-than-expected sales figures for the June quarter had lifted the retail sector’s sales expectations for coming months.
It said retailers were preparing for a surge in consumer spending over the Christmas period, with sales expectations for the December quarter climbing to a 12-year high and profit expectations now out of negative territory.
Dun & Bradstreet chief executive officer Gareth Jones said a solid performance in the June quarter had provided a welcome uplift in sentiment for the retail sector that had faced a prolonged period of deflated spending.
“The retail sector is being challenged by conservative consumer behaviour, which is forcing discounting and putting pressure on company margins,” Mr Jones said.
“The second quarter improvement is undoubtedly a welcome respite and it has raised hopes for a solid performance in the lead-up to Christmas.
“However, it is clear retailers have hinged their hopes on a continuation of discount campaigns, with executives indicating they will lower prices in the December quarter.”
To meet the expected Christmas demand businesses were planning to replenish inventories and increase staff numbers, Dun & Bradstreet said.