KEY POINTS:
Some retailers are already preparing for a lacklustre Christmas by discounting early so they do not get caught with surplus stock, the New Zealand Retailers Association says.
Even so, association executive director John Albertson said the sector was "cautiously optimistic" about Christmas and summer trading.
But he said some were discounting before Christmas in case trading did not bounce back from flat revenue in December and January.
Albertson said the Christmas period remained a big part of revenue and poor sales could seriously affect quarterly and annual results.
This was especially the case with clothing retailers, who restocked with new season's items in February.
Forsyth Barr retail analyst Guy Hallwright said the impact of Christmas trading was illustrated with sales last year going from $3 billion in November to $4.9 billion in December.
So if Christmas and early January sales were down, subsequent discounting could have a big impact on annual results with discounting of stock eating into profits.
The Warehouse Group takes 40 per cent of its sales revenue in December and January, chairman Keith Smith said yesterday.
Albertson said retail sales had enjoyed three strong years, though bad weather had hurt apparel and outdoor furniture.
He said retail revenue in November had been mixed. The association had kept its prediction for December sales to be up 5 per cent on last year - or around $50 a person this year, Albertson said.
Christmas Day this year being on a Tuesday would encourage late Christmas shopping that would make it more difficult for retailers to judge the market until the end of the month.
Hallwright said he had noted the December discounting. He doubted there was more than last year, but there had been reports of over-stocking by some retailers.
"Analysts will be talking to retailers before Christmas but it is very hard to tell because so much of Christmas happens in the last week when things just go ballistic."
Briscoe Group chief executive Rod Duke described trading as "patchy", with sales varying day byday.
He said spending was related to money in pockets, and the high cost of petrol along with higher mortgage payments had lightened wallets.
Andre Dutkiewicz, chief executive of Noel Leeming Group, which owns Noel Leeming and Bond & Bond, said November trading had been "very tough".
"It has been tracking much better but it's not as good as we'd like it to be."
He expected consumers' mood to have an effect, with many of the electronic goods stocked by the group's stores dependent on discretionary spending.
Postie Plus chief executive Ron Boskell said trading for the year so far had been difficult.
Postie Plus Group chairman Peter van Rij summed up the year in his annual address to shareholders on November 30.
"We are operating in a competitive market with less confidence in the economy than last year, compounded by the impact of higher interest rates, fuel costs and other costs of living with consequential pressure on retailers and other sectors of the economy."
