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Australian Risk Climate: Retailers Fix Hopes on Bumper Christmas

Retailers are 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.  The retail sector’s sales expectations index is 12 points above the national average, a result that comes off the back off a stronger than expected June quarter.

The June quarter sales result, which was significantly better than the prior quarter, has provided a boost to industry confidence however, it coincides with widespread discount campaigns. Price reductions are expected to continue over the Christmas period, with retailers’ expectations for selling prices falling to the lowest point in seven years.

To meet the expected Christmas demand businesses are planning to replenish inventories, with the index rising from -8 to 33. Retailers are also expecting to increase staff numbers, with the employment index up seven points to six.

Retailers’ expectations for the coming holiday season are substantially more upbeat than the same period last year, when the sales and profit expectations indices were at a conservative 5 and -1 respectively. This compares to a current index of 50 for sales and 11 for profits.

According to Dun & Bradstreet’s CEO, Gareth Jones, a solid performance in the June quarter has provided a welcome uplift in sentiment for a sector that’s faced a prolonged period of deflated spending.

To read the full story click on the attachment:  Dun Bradstreet Business Expectations Survey Sept 2012

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