Australia’s economy is still growing but at a reduced rate. GDP growth in the September quarter was just 0.3%.
Compare that to the gangbusters number out of the US last night which showed Q3 growth at a stunning 5% and you have the difference between a booming economy and one that’s just trudging along.
Earlier this month, federal Treasurer Joe Hockey urged the country to “not let Santa down” and have the confidence to spend in the weeks leading into Christmas.
But the shops in the lead-up to Christmas have been remarkably, visibly quiet on some days.
Walking into Sydney’s Westfield off Pitt Street in the CBD yesterday, there were people browsing, but not many had shopping bags in their hands. And as you walked deeper into the wings of the building the crowds vanished, replaced by bored looking shopkeepers in empty stores.
One manager said business was only a third of what it was last year, and that they had been closing the shop early because it was so quiet. Other stores have brought forward their Boxing Day sales in recent days in an attempt to get stock moving.
This was two days out from Christmas.
Another one of these desolate stores was women’s clothing store Forecast, where a retail assistant said the Martin Place siege may have had an effect.
“Three weeks before Christmas was very busy but two weeks before Christmas was very quiet, maybe because of the Martin Place incident.
“Normally we’ll have a really busy week but last week that drastically changed. I think another reason is that workers are going on holidays for Christmas.”
A staffer working in the cosmetics department in David Jones had the same hunch.
“I think for a couple of days after (the siege) people were reflecting and therefore leaving things a bit later, that’s the sense that I get this year – people have left things a lot later.”
She also said online shopping has changed people’s buying habits, now buying products with online deals through the year, and using those purchases as Christmas presents.
“With the internet, and people being a lot more tech-savvy, they are looking for bargains the whole time, we all are.
A dress store in Pitt Street Mall called Bariano also said their sales have been so slow that they, like many other stores around them have brought forward their traditional Boxing day sale.
“It’s been quite slow for us, it’s not as busy at all,” one of the store assistants said.
“We have a massive sale on, we’ve never had a sale like this before. It’s because we’re doing quite bad and we need to get rid of the stock to get the new collection in January, so we’ve had to do the sale really, really early.
Another retail assistant, who asked not to be named, working in a hand watch store said sales have been so poor for their business this Christmas period that they have been closing up early.
“We’re so dead. My boss said last year we were making triple to what we are making this year. It’s crazy. We were over budget 16 grand for the month. Everyone is walking around with JB Hi-Fi bags.
People can’t afford to splurge
“Maybe it’s because people don’t want to spend in the hundreds. Our cheapest item is $300. I think people are going for the cheaper gifts this year.
“As opposed to last year it’s dead… We’re struggling to get over a grand a day,” she said adding that the business normally makes most of its budget in the Christmas period.
“We’ve been closing early, today I’m going home at five.” Most stores in the city stay open until 9-10pm for last minute Christmas shopping.
When then visited Alannah Hill, another store to have brought forward their sales.
We asked one of the store assistants if that was normal “Mmm, yeah,” she, said, but quickly added: “We’ll get more at five.”
There was one customer in the store.
Christmas is a great time for retailers to balance sales during the slow periods of the year.
But the lack of shoppers in Sydney’s centre is just another hurdle for a retail sector already buffeted by the persistence of weaker than normal consumer confidence, a high savings rate and Australians continuing to reduce their discretionary spend.
As we head into 2015 with unemployment on the rise if our walk around is indicative of a broader reduction in spending this Christmas retailers are in for another tough year.
Here’s a look at what Sydney’s stores have looked like this Christmas.
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