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Roy Morgan predicts Christmas sales within 0.1% - again

Roy Morgan's 2018 Christmas retail sales forecasts of $51.479 billion for the key pre-Christmas retailing period were within 0.1% of the actual retail sales result of $51.410 billion. The accuracy for 2018 matches the accuracy of a year ago when Roy Morgan’s pre-Christmas sales forecasts were also within 0.1% of the actual retail sales for the period – covered in detail here.
Roy Morgan's 2018 Christmas retail sales forecasts of $51.479 billion for the key pre-Christmas retailing period were within 0.1% of the actual retail sales result of $51.410 billion. The accuracy for 2018 matches the accuracy of a year ago when Roy Morgan’s pre-Christmas sales forecasts were also within 0.1% of the actual retail sales for the period – covered in detail here.

Roy Morgan's annual retail sales forecast undertaken in conjunction with the Australian Retailers Association (ARA) predicted total retail sales growth of 2.9% to $51.479 billion for the most important retailing period of the year from November 9 til Christmas Eve. This is just 0.1% higher than the 2.8% growth achieved.

Retail sales growth again out-paced inflation in the year to December which the ABS reports at an annual rate of 1.8%. The impressive sales growth came on the back of a relatively high level of Consumer Confidence which averaged 117.8 in November/December 2018 according to the ANZ-Roy Morgan Consumer Rating, an increase of 2.8pts on a year ago, and the highest Consumer Confidence for the pre-Christmas period since November/December 2013 (118.7).

State by State growth

Analysing retail sales figures on a State-by-State basis shows it was Victoria, which grew fastest with pre-Christmas retail sales growing 4.6% to $13.43 billion. Growth was also faster than the national average in Queensland, up by 3.5% to $10.256 billion and Tasmania, up by 4% to $1.038 billion.

Growth in Australia’s largest State of New South Wales was solid increasing by 2% to $16.448 billion while growth was once again slowest in post mining boom Western Australia, up just 0.8% to $5.437 billion.

Retail Category growth

There was growth across five of the six categories measured in the pre-Christmas period with spending on Food growing the fastest, up by 4% to $20.979 billion. Also growing impressively was the Clothing, Footwear & Accessories category which grew 3.8% to $4.056 billion and Other Retailing which grew by 3.5% to $7.375 billion. All three of these categories grew at a slightly greater rate than Roy Morgan’s pre-Christmas forecasts.

Methodology


The ARA defines the pre-Christmas trading period to include sales from 9 November through 24 December 2018, and the post-Christmas trading period to include sales from 26 December 2018 to 15 January 2019.

Roy Morgan uses statistical modelling to forecast the retail spending trend for overall retail trade in Australia, in each of the eight States and Territories, and for six retail categories: Food retailing, Household goods retailing, Clothing, footwear and personal accessory retailing, Department stores, Cafes, restaurants and takeaway food services and Other retailing.

The Roy Morgan-ARA Christmas sales forecasts are based on data taken from the ABS Retail Trade Catalogue 8501.0. Note that online sales through Australian retail stores are included in the retail figures. Sales forecasts are determined by historical retail trade data from the ABS, Roy Morgan’s Consumer Confidence and unemployment data, and various other data relating to macro-economic conditions (e.g. income, inflation, interest rates).

Michele Levine, Chief Executive Officer, Roy Morgan, says despite concerns about a soft Christmas retailing period growth across the entirety of the pre-Christmas retailing period was solid and well above the annual inflation rate:


"Industry concerns about a slower than expected pre-Christmas retail sales period were not borne out with Australians spending $51.410 billion in the seven-and-a-half week period between November 9 and Christmas Day, up 2.8% on a year ago and well above the ABS annual inflation rate for 2018 of 1.8%.

“The final industry sales figure for the period was within 0.1% of the Roy Morgan forecast released in conjunction with the Australian Retailers Association in mid-November of 2.9% and represents a slight improvement on the growth of 2.7% achieved in the same period a year ago.

“The strongest retail sales growth was seen in the categories of Food which increased 4% to $20.979 billion, Clothing, Footwear & Accessories which was up 3.8% to $4.056 billion and other retailing which increased 3.5% to $7.375 billion.

“On a State and Territories basis the standouts were Victoria which experienced growth of 4.6% to $13.430 billion, Queensland which was up 3.5% to $10.256 billion and the smaller jurisdictions of Tasmania (up 4% to $1.038 billion) and the ACT (up 5.1% to $961 million.

“The best indicator of consumer sentiment, and under-pinning the accuracy of forecasts of retail sales fortunes, is the ANZ-Roy Morgan Consumer Confidence Rating which averaged 117.8 in November/December 2018. This represented an increase of 2.8pts on a year ago and the highest the weekly Consumer Confidence indicator has been in the pre-Christmas period for five years since 2013.

“The widely discussed ABS Retail Trade monthly data for December 2018 showed a slight contraction on November but the December monthly figures considered alone fail to take account of changing retail patterns in Australia. The ‘Black Friday’ sales period continues to grow in importance in Australia’s pre-Christmas retail environment and always falls in the last week of November.”

For comments or more information please contact:
Roy Morgan - Enquiries
Office: +61 (03) 9224 5309
askroymorgan@roymorgan.com


About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2