With this in mind, Australian retailers are planning to use every trick in the book to persuade customers to open their wallets.
Chinese discount retailer Miniso runs 34 stores across the country, including in major shopping hubs such as Chadstone and Pitt Street Mall. Local managing director Richard Li told The Age and The Sydney Morning Herald the company was prepared for a huge influx of shoppers on Boxing Day.
“We’ve done Boxing Days for a few years now so we know how crazy it can be,” he said.
Along with increasing both opening hours and staffing, Mr Li says store layouts will also be changed to look different than normal, providing shoppers with a “new experience” on the day.
Miniso will also be issuing a flat 50 per cent discount to all products in its store for the first time this year, having only done product-by-product discounts in the past.
“We’ve found customers want things to be straightforward, they don’t want to play the numbers game on a busy day like Boxing Day,” he said.
We’ve realised if we want to win the battle, we have to do something different.
Richard Li, Miniso Australia managing director
Major department store Myer has also planned for a spending extravaganza on Boxing Day, with shoppers at its Melbourne and Sydney flagships allowed to line up as early as 3am, with doors opening at 5am and not closing until 11pm.
Those stores will include live performances from jugglers, stilt walkers and unicyclists.
Discounts of between 40 and 50 per cent will also be applied in some key categories, such as homewares, with the department store expecting two million shoppers through its doors on Boxing Day alone.
Whether these expectations will be met remains to be seen. National accounts data released earlier this month revealed the July 1 tax cuts and multiple interest-rate cuts have triggered a sharp spike in national savings, with Australians saving $14 billion in the September quarter alone.
Simultaneously, retail sales volumes suffered their worst monthly result since the 1990s recession in the month of September, shrinking 0.2 per cent over the year.
HSBC chief economist Paul Bloxham said borrowers were clearly using tax and mortgage relief to pay off their mortgages faster, rather than head to the shops.
“Households got a boost to their incomes from lower interest rates and tax cuts and have chosen so far to save it. This is clear evidence that monetary policy is working,” he said.
“They have the income and at some point they might choose to spend it. The question is how soon does that happen?”
Official retail sales figures for December will not be released until February, and Mr Bloxham said it was not possible to know until then how the Christmas trading period had gone.
But with consumer spending, including on both goods and services, making up around 55 per cent of annual gross domestic product, consumer spending intentions held the key to economic growth in 2020, Mr Bloxham said.
“The bottom line is if consumers continue to save and if consumption growth continues to be sluggish then it’s hard to think that GDP growth will pick up very much,” he said.
Mr Li remains optimistic, with expectations Miniso’s Boxing Day will be “100 per cent” bigger than last year, with stock already running out on some key product lines.
However, Mr Li’s optimism may just be his own, as the retailer admits other shopkeepers he has spoken to are far less sanguine.
“To be honest, the atmosphere and feeling has not been good this year, and isn’t very positive for next year,” he said. “We’ve realised if we want to win the battle, we have to do something different.”
Dominic Powell writes about the retail industry for the Sydney Morning Herald and The Age.
Jessica Irvine is a senior economics writer with The Sydney Morning Herald.