What happened with Boxing day?
The news stories all seem to indicate that Boxing day was a huge success for retailers (*,*). If this is the case, then the rapid slowdown in retail spending recorded over November and early December may have been the result of timing issues and price expectations, rather than poor consumer sentiment.
What do I mean? Well, it is possible to delay transactions – buying the same thing tomorrow is a substitute for buying it today. As a result, if consumers thought that there would be big sales on boxing day, they may have put off purchases earlier in the month.
Now, if this is the case, retailers appear to have caught the consumers here. When I went shopping, the sales appeared to be little different to the sales available prior the Christmas.
Even with the lack of cut price deals, people obviously still went out and bought things – I couldn’t even find monopoly at the Warehouse 🙁
What was your impression of the boxing day sales?
Happy New Year!
Ｉ just got back from my holidays in HK and Singapore. While I know nothing about the boxing day sales here in NZ, I have to say I was so impressed by the enthusiasm of the shoppers over there. I also noticed shoppers from nearby areas e.g. Malaysia, Thailand, China mainland, even Japan.
However, because of the relatively cheaper NZD (compared to early/mid 2008), I didn’t find things extremely cheap over there (but I’ve made my contribution to the recoveries of these economies – they’ve been in recession since late 2008).
So how was the boxing day sales here in NZ?
I avoided the boxing day sales – far better to just ‘chill’ with family and friends than join the mad rush.
However, what I did notice was that on the 28th shelves were STILL empty, more so than I can remember from previous years. I suspect retailers had convinced themselves the slowdown in consumer spending would be worse than it turned out to be, and were caught short on stock.
I’ll have to wait until December GDP and stock/inventories data to see if I’m right
Hi Jiani,
I’m sure that HK and Singapore will appreciate your efforts to kick start their economies 😉
I have to say I was disappointed with the boxing day sales here – there were a lot of people, but I was hoping for ridiculously low prices 🙁
Hi Phil,
I noticed that a large number of stores in Wellington were looking very understocked. If it turns out that inventory levels are low then that would be VERY interesting – especially given that retailers were complaining about excessively high inventory levels in September.
Personally, I think it might be a distribution issue. Places like the Warehouse mainly source stock offsite at a central warehouse, and run only a skeleton stocking crew during Christmas (given the difficulty associated with getting staff in at midnight close to Christmas to stock shelves. As a result, if demand peaks during this time they can be left high and dry – with empty shelves and excess stock.
Of course, we also have the issue of composition. Some store types may have done well and run down stock – while other, overstocked, retail types have continued to be overstocked.
From talking to people, it appears that, in total, the December quarter was surprisingly poor for retailers. I guess we will see in a couple of months 🙂
Note: If retailers are now low on stock, I would be worried about our trade balance – consumption imports have been running strong over most of the year but consumption levels have been falling. If aggregate stocks are low now, then where have all the consumption goods gone?