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Australia’s largest online book retailer Booktopia has cut up to 40 staff in its latest round of cost-saving measures, as it aims to shake off its recent history of leadership plot twists and financial losses.

The company said in an announcement on Monday, that it had implemented a number of cost-cutting measures as a response to changing consumer sentiment, greater online competition and inflation.

That includes an organisational restructure involving “30 to 40 redundancies,” or about 10 to 15 per cent of its employees, which the bookseller expects will save between $4 million and $5 million in annualised costs.

Booktopia chairman Peter George said the measure was part of a vision to position the company for challenging online retail conditions in the near term. “Letting some of our talented staff go as part of these cost-cutting initiatives is a disappointing but necessary step in these economic times,” he said.

A spokesperson for the company said the redundancies were largely in administrative roles rather than warehouse positions.

Shares in the company were up 32 per cent on the announcement, closing at 27.5 cents. Booktopia shares have shed hundreds of millions of dollars in value since listing on the ASX in December 2020 at $2.30.

An investigation by The Age and Sydney Morning Herald revealed that the group fell out of favour with investors during its first 18 months on the ASX amid concerns about its leadership.

Struggling to meet its earnings forecasts after a period of strong pandemic-inspired growth, the bookseller quietly began laying off staff last year.

Nash effectively returned to the helm of the company last September as executive director, after calling for a shareholder meeting in August, with a plan to use his family and friends’ 30-per-cent-plus stake to overhaul the board.

The company’s four remaining directors resigned, leaving Booktopia searching for replacements. In December, Peter George, well known for his execution of corporate turnarounds, was appointed chairman and non-executive director. George has been involved in several prominent turnarounds including those for Nylex and, more recently, Retail Food Group.

Other cost-cutting initiatives announced on Monday included an increase in postage and handling costs for consumers, price adjustments on various products to reflect increasing costs and a reduction in the company’s lease obligations.

The initiatives are expected to deliver $12 to $15 million of improvements to the company’s earnings in FY24 and beyond.

Kogan.com Limited has reported an inventory reduction in-warehouse of 39% since June 30, 2022, buoyed by unprecedented discounting that has impacted gross profit and gross margin.

Inventory has been reduced to $98.3 million (comprising $84.1 million in-warehouse and $14.2 million in transit) as at December 31, 2022, from $159.9 million (comprising $137.9 million in-warehouse, and $22.0 million in transit) as at June 30, 2022.

The reduction in inventory did result in reduced operating costs across both warehousing and marketing, and supported a growth in net cash (after loans and borrowing) to $74 million - after having funded the Mighty Ape Tranche 3 payment ($14.2 million), repaid loans and borrowings of $25 million and successfully acquired online homeware brand Brosa. 

Having now cleared through the bulk of this excess inventory, Kogan said it will continue optimising operating costs and streamlining the business to return to the levels of operating margins previously delivered prior to the COVID-19 pandemic. 

The Company expects gross margins to improve from January 2023, and to further optimise operating costs progressively through the second half of the financial year. 

Meanwhile, the half saw Kogan First subscribers grow to 404,512 by December 31, 2022 (47.6% growth year-on-year) and Kogan Mobile Australia reach the most ever Active Customers in its history (4.2% growth year-on-year). 

However, Kogan reported that the reflected subdued sales activity for the Company, whilst cycling a half in the prior year that was impacted by COVID-19 lockdown orders. 

Kogan.com founder and CEO Ruslan Kogan said the impacts of inflation and interest rates have begun to affect the lives of Australians and New Zealanders. 

“We’ve been growing Kogan.com for more than 16 years now, so we’ve been through many cycles, and we know that when customers are watching their costs carefully, eCommerce becomes even more important,” Kogan said.

“Since Kogan.com launched out of a garage in 2006, we’ve been obsessed with making the most in-demand products and services more affordable. We are proud to be making that possible for our millions of customers and the growing base of loyal Kogan First Subscribers. 

For the half, Kogan.com reported a gross sales amount of $471.1 million, down 32.5% year-on-year, said to be impacted by soft trading condition. It achieved a gross profit of $62.9 million.

Variable costs as a percentage of gross sales reduced to 7.6% in the first half of FY23 from 8.5% in the prior corresponding period.

Discount retail chain The Reject Shop has lost its chief executive after just six months in the job as its sales recovered from last year’s COVID slump.

In an announcement to the ASX on Wednesday, the company said Phil Bishop had resigned for personal reasons, and that the search for his replacement would commence immediately. He will leave with six months’ pay and statutory entitlements.

“On behalf of the board and The Reject Shop team, we thank Phil for his work over the past six months and wish him well,” the retailer’s chairman Steven Fisher said.

Shares in the company slipped 2.4 per cent to $4 about midday.

Bishop served as chief operating officer at Officeworks before joining The Reject Shop in July. His predecessor Andre Reich had resigned from the top job to pursue other opportunities in April.

The company’s Chief Financial Officer, Clinton Cahn, will be acting chief executive, having performed the role in the transition period between Reich and Bishop last year. He’ll also remain finance chief during the search for a new CEO.

The Reject Shop, which has 377 stores across Australia, flailed in the first half of last year, as shoppers stayed at home due to the Omicron variant of COVID-19.

But business improved over the past months, with the company flagging a 3.5 per cent rise in sales to $439.7 million for the latest half, and operating earnings between $22.5 million and $23.5 million, up from $20.5 million in the December half of 2021.

With shoppers having returned to shopping centres and stores, the “positive momentum” has continued during the first four weeks of the year, the company said. The Reject Shop will report its half-year results on February 23.

The news of Reject’s CEO departure comes as discount retailer Best & Less is also searching for a new chief executive after its boss Rodney Orrock stepped down on Wednesday for health reasons. He will leave the company at the end of his medical leave in late February.

“While Rod continues to make good progress in his treatment and recovery from lymphoma, he has decided to step down to prioritise his long-term health,” the company said in an announcement to the ASX.

Best & Less said an external search process for a permanent chief executive was underway, with Jason Murray remaining as executive chair in the interim.

A consumer spending slowdown is setting the scene for a fierce battle on price in the department store sector after a strong start to 2023 by Myer and David Jones.

Analysts warn that while the iconic big two department stores are heading into this year with strong foundations, their discount peers – chains such as Kmart and Big W – may be better placed to capture budget-conscious shoppers as households “trade down” purchases over the next three months.

Australian Bureau of Statistics retail figures for December 2022 showed department store sales took the biggest month-on-month hit of any category, down 14.3 per cent compared with November.

However, recent trading updates from Myer show the company’s sales were up by close to 25 per cent in the first five months to December, while David Jones’ turnover was up 31 per cent.

Morningstar analyst Johannes Faul said the ABS figures needed to be viewed in context of the incredibly strong November for the sector as shoppers flocked to the Black Friday sales.

“It was a decline in December, but on an amazing November,” he said. “Year-on-year, department store sales are up.” The sector generated $1.7 billion in December 2022 – up from $1.5 billion in 2021.

Despite a COVID rebound, overall retail sales growth is slowing, and Faul said he expected shoppers to “dial back” discretionary purchases over the next six months.

That trend could spell trouble for department stores such as Myer and DJs, which sit in the middle of the market, said co-director of RetailOasis, Trent Rigby.

He said as consumer confidence fell and spending slowed, speciality retailers such as The Reject Shop and discount department stores such as Kmart tended to benefit while mid-market operators found it tough to maintain momentum.

“Expecting consumer confidence and spending to continue to trend the way they are for the rest of 2023, then big players within that middle market [like] Myer, Target and DJs will be the worst impacted.”

Director of valuations at global advisory firm Gordon Brothers Brendan Smyth agrees that discount players could see an advantage when shoppers “trade down” discretionary purchases as they search for the lowest price.

“There is going to be more consumers being more conscious about where their dollars are being spent and how they’re spending,” he said.

“Maybe it’s a bit more affordable to go to Myer than it is to DJs, it’s a bit more affordable to go to Kmart than it is to Myer, maybe Big W is even more affordable than Kmart is.”

But Smyth says the discount end of the market will also have its own challenges this year even if they pick up more customers as higher supply chain costs eat into margins.

“Where it’s going to be hard for those discount players is that they sell a lower-margin product, but they need to make margins themselves.”

Kmart and Big W are yet to release trading updates for the past few months, though Big W’s owner, Woolworths, confirmed last November that the store had a 30 per cent jump in sales in the three months to September.

Myer investor Wilson Asset Management is upbeat about the department store’s position going into a slowdown, with portfolio manager Oscar Oberg saying the company’s turnaround plan is on track.

“Over the next six to12 months we will start to see more inbound tourism and more people coming into the city which will be very positive for Myer’s CBD stores. There’s a long way to go [in terms of growth] here and we think the business can generate profit over $100 million per annum very soon.” Oberg said.

Rigby says his team is viewing a bounce-back in the department store model as somewhat temporary, however, warning that the broader challenges facing the entire sector have not gone anywhere.

“The biggest challenge for department stores will be how they attract and maintain a younger digital consumer,” he said.

Smyth believes it will be the brands that match their offers best to budget-savvy shoppers that will have the edge this year.

“Pricing, relevance to the customer and customer experience are all going to be the key things,” he said.

Australians sharply reined in Christmas shopping in December, in the first sign that runaway inflation and surging interest rates are weighing on household budgets.

Retail sales dropped by 3.9 per cent to record the first monthly fall for 2022, according to seasonally adjusted figures from the Australian Bureau of Statistics.

ABS head of retail statistics Ben Dorber said “the large fall in ­December suggests that retail spending is slowing due to high cost-of-living pressures”.

“Retail businesses reported that many consumers had ­responded to these pressures by doing more Christmas shopping in November to take advantage of heavy promotional activity and discounting as part of the Black Friday sales event,” he added.

Inflation reached 7.8 per cent in December and economists predict a collapse in consumption through 2023 as high prices and higher mortgage repayments bite.

Analysts, however, said they still expected the Reserve Bank board would deliver its ninth straight rate hike next Tuesday, taking the key cash rate from 3.1 per cent to 3.35 per cent.

Citi chief economist Josh Williamson calculated that spending on discretionary items fell by 5.4 per cent in December – the biggest drop since lockdowns in April 2020.

“The fall in nominal retail trade at the end of 2022 may be a signal that monetary policy is starting to work via the channel of discretionary spending. But the RBA can’t take this as a signal to stop tightening next week,” he said.

Mr Williamson said he ­expected a further cash rate increase next week, following by two more to a peak of 3.85 per cent.

The retail sales figures exclude spending on services such as travel and accommodation and which economists believe boomed over summer as Australians enjoyed the first Christmas holidays free of Covid restrictions.

Taking this into account, Capital Economics senior economist Marcel Theriault said “a solid ­increase in services spending means overall consumption should still have risen at a decent clip”. “But the engine of Australia’s reopening rebound has shifted down a gear,” Mr Theriault said.

Despite the surprisingly large fall in spending in December – ­analysts had forecast only a 0.2 per cent decline – retail sales remained elevated following a booming 2022 in which Australians continued to spend freely despite steadily higher interest rates, soaring inflation and plunging real wages.

Retail spending was up 7.5 per cent over the year to December, the ABS data showed.

Economists also noted the difficulty in accounting for seasonal factors thanks to the ever-growing popularity of the Black Friday and Cyber Monday sales, which are timed around the American Thanksgiving holiday.

The retail industries that suffered the largest falls in sales in ­December were those which ­experienced the biggest boosts during the November sales events, the ABS said. Department store sales collapsed 14 per cent, followed by a 13 per cent drop in spending on clothing and footwear, and an 8 per cent decline in household goods, according to the seasonally adjusted figures.

“Seasonal spending patterns continue to change and evolve around Black Friday and the holiday period,” Mr Dorber said.

“While there was a strong rise in original terms for December, as is expected in the lead up to Christmas, this year’s rise in original terms was smaller than those typically seen in past December months. This has led to the large seasonally adjusted fall.”

Food retailing was the only ­segment to record an increase in December – up a slight 0.3 per cent, while cafes and restaurants spending was flat. Shoppers spent less than usual across the states and territories, with 4.7 per cent declines in Victoria and Western Australia leading the falls. Retail sales in NSW fell by 3.4 per cent.

A “growing appetite” for luxury brands is driving demand for space in prime Sydney CBD retail locations, according to research from Ray White.

Sydney CBD’s prime retail real estate comprises Martin Place, Castlereagh Street, Park Street and George Street, along with Pitt Street Mall.

According to Vanessa Rader, head of research at Ray White Commercial, an increase in the personal and household goods retailing segment due to an influx of jewellery retailers, which now account for 21.5 per cent of stores, not far behind clothing and soft goods, which account for 31.2 per cent. Services such as banks, communications, beauty and medical contribute 16.1 per cent.

Rader said an increasing number of international luxury brands have converged on the Sydney CBD retail areas during the past two years.

“The growing emphasis on these establishments within our CBD brings a new level of quality and activity back to the city after a difficult few years and now represents 23.4 per cent of our street-fronted shops within our prime retail core.”

Despite rising interest rates, Rader says there is strong demand for luxury brands by consumers, both domestically and from overseas visitors.

The redevelopment of MLC has added brands like Valentino and Messini to Castlereagh Street which has been home to Chanel, Bvlgari, Hermes, Gucci and Prada. Dior has relocated to this precinct area while Cartier secured a new flagship location on George Street.

King Street now features Hublot, Panerai, Tiffany & Co and Chaumet.

The results from Myer and a week ago JB Hi-Fi tell us a lot about the two individual companies themselves, the broader retail dynamics, and the post-Covid post-rate hikes economy.

The core point to bear in mind is that JB and Myer sit at opposite ends of the 21st century retail reality.

JB has been one of the outstanding successes, very effectively riding and indeed exploiting and conquering the wired - and indeed, unwired: read Wi-Fi - world of today.

Myer in contrast looked like being confined to the dustbin of sprawling 20th century bricks and mortar department store history. What worked, so brilliantly, for Harry Selfridge and Sydney Myer, worked no more a century later.

Well, no surprise, JB keeps ‘hitting it out of the park’. Sales up 8.6 per cent, profit up 14 per cent. Whatever CEO Terry Smart is putting in the morning coffee, it’s kicking butt.

With apologies to Terry, even more impressive though were the numbers unveiled by Myer CEO John King.

I might add that King is the very model of my perfect CEO: just getting on with delivering results. No bombast, no pontificating. So, please Sol, even if grudgingly, give him a tick.

Myer reported sales up a stunning 25 per cent in the five months to December 31; including an even more mind-boggling 38 per cent actually in its stores. As a consequence online sales actually dropped 9 per cent.

The explanation of both, up to a point, was a certain premier named Dan Andrews, and to a lesser extent one named Dominic Perrottet. That’s to say, those lockdowns in the 2021 base comparative period.

But it wasn’t just about springing back from closed stores. Myer sales were actually up 19 per cent on the last, December half 2019, pre-Covid period.

That’s to say, there is – seemingly rather vibrant – life in the old blended bricks and mortar and online girl after all.

That’s the key point about Myer and King. He’s succeeded in keeping the stores vibrant – albeit, where necessary, closing them – while developing an online business which is now of serious and more critically sufficient scale.

Yes, online sales dropped from the 2021 lockdown comparative period. But they were still way up on the pre-Covid period and now comprise one in every five dollars spent at Myer.

In short, the Myer growth future is online, and it’s got the business to go there, while rebalancing the bricks and mortar to a sustainable, profitable future.

In short, Myer and JB combine to tell us there is a retail future both in stores and online.

The key to success is balancing the two, while precisely locating the physical locations and making the online offer seductive and seamless and indeed connected to the core stores’ physical reality.

Now, there is good and bad news in the broader message delivered by both Myer and JB.

That message is, simply, that despite rate rises, the consumer has disposable money and the consumer is prepared to spend.

The good news should be obvious: the economy ain’t going over any sort of cliff anytime soon.

Further, again both good and bad news, the consumer is spending that money locally.

The ‘bad news’ part is of course what it says about inflation and interest rates.

Simply, that inflation ain’t going to miraculously and conveniently, disappear; and rates aren’t going to go back to the fabulous ‘free money’ levels of 2020 and 2021.

That said, as 2023 unfolds, I suggest that China is going to throw a – positive, broadly unexpected – curve ball into everything.

We are going to see China ‘get back to work’ – simply, delivering cheap product to the world.

I can see a very, very positive global dynamics – if politicians and activists don’t cruel it.

Tattarang has announced a significant investment in Camilla Australia Pty Ltd (CAMILLA), the Australian fashion brand owned and creatively directed by Camilla Franks.

The brand has now grown into a global group since its launch in 2004, sold across 65 countries.

Tattarang Director Nicola Forrest AO confirmed the investment makes Tattarang a minority shareholder. 

“We are delighted to back Camilla Franks, an extraordinary entrepreneur leading a cutting-edge fashion brand doing amazing things in the creative space,” Forrest said.

Forrest said Tattarang would also focus on female founders at an earlier stage in their entrepreneurship journey and she aimed to assist more businesswomen to develop successful enterprises at the scale of CAMILLA.

“Camilla is a brilliant example of a passionate and committed entrepreneur who truly cares about her brand and her customers and has put Australian fashion on the global stage, as well as being a role model to other female founders,” she said.

Franks said that she was delighted to welcome Tattarang as an investor and partner in CAMILLA, marking the first investment partnership the business has made since it was founded 18 years ago.

“I’ve finally found the perfect partner to help us colour the world. Partnering with Nicola and the Tattarang family is the perfect brand fit for our future vision.

“Through purposeful storytelling, creative and conscious empowerment and shared values and dreams we can take the business to a wider world stage.

“Together, we can elevate women on a global scale, harnessing the amazing artistic talent Australia has to offer, and lead with passion. It brings me great joy and pride to announce I will be joining forces with Tattarang to grow and share this beautiful brand,” Franks said.

Forrest said she is actively working to level the playing field for female entrepreneurs and woman-led or founded businesses, with Tattarang allocating capital both directly and via early-stage female-focused funds.

“It’s time for change: I believe that equal is greater and that having gender as a focus will deliver results for both women and men,” Forrest said.

“This is good for business because there is a strong correlation between gender equality and organisational success across profitability, attraction and retention of best talent and business reputation.

“We will support the next generation of women entrepreneurs who are willing to take a risk and back their dreams — Australia needs more entrepreneurs like Camilla Franks,” she said.

The investment priorities for CAMILLA include additional stand-alone boutiques – particularly in the United States.

International sales now represent ~40% of business sales, with the United States representing the most successful international market overall.

CAMILLA has also transitioned into a global omnichannel brand – more than doubling its digital mix over the last three years, growing from 18% in 2018 to 47% online sales today.

The growth in online sales is complementary to an experiential bricks-and-mortar presence which consists of 25 retail boutiques across Australia and the United States, and 264 wholesale stockists across the globe spanning 65 countries.

Asia-based omnichannel brand operator Bluebell Group has expanded its reach into Australia, initially with brand partners Gentle Monster and Pinko.

The retail group marked its market debut with the opening of Italian fashion label Pinko in Sydney’s Westfield mall in November, followed by the launch of South Korean luxury eyewear brand Gentle Monster’s first store in Australia at Sydney Airport before Christmas. 

Bluebell Group said it has a larger plan for Australia this year, aiming to expand the current in-market brand partners’ presence in the country and introduce other brands as well. 

Australia marks Bluebell Group’s first market outside Asia and its 10th market after Japan, South Korea, Mainland China, Hong Kong, Taiwan, Macau, Singapore, Malaysia and Cambodia. 

Brands the company partners with around the region include AllSaints, Anya Hindmarch, Bally, Celine, Christian Dior, Davidoff, Fendi, Furla, Givenchy, Jimmy Choo, Kenzo, Loewe, Louis Vuitton, Love Moschino, Marc Jacobs, Moschino, MSGM, Owndays, Paul Smith, Rimowa, Sergio Rossi, Tod’s and Ugg.

“Opening the Australian market is a milestone for us, completing our Asia Pacific footprint from Japan all the way down to the Southern hemisphere,” said Nelly Ngadiman, MD of Bluebell Southeast Asia & Australia. 

Gentle Monster joined Sydney Airport’s new luxury retail tenant lineup in the T1 International terminal disclosed last August, which also includes Balenciaga, Prada, Bottega Veneta, Burberry, Bulgari, Moncler, Hermes, Loewe, Rolex and Saint Laurent.

The Australia launch follows Bluebell Group’s recent full acquisition of China’s Hainan-based travel retail operator Star Brands Travel Retail. 

Founded in 1954, the family-owned group has more than 3800 employees, 600 points of sale and US$2 billion in turnover. 

The Australian shopping spree has continued with retail spending surging in November, a sign the Reserve Bank is likely to continue raising interest rates in coming months in a bid to rein in inflation as the global economic outlook deteriorates.

The spending was despite high costs for building supplies and labour and larger bills for dining out lifting inflation back up to a 32-year high in the lead-up to Christmas, and as forecasts show the global economy is on the brink of recession.

Monthly data from the Australian Bureau of Statistics showed inflation rose to 7.3 per cent in the year to November, back to September’s level after dipping to 6.9 per cent in October.

Treasurer Jim Chalmers said November’s inflation data highlighted the economic pressure being felt by all Australians.

“Even after inflation peaks in our economy, we need to remain vigilant to the global economic pressures that will continue to impact us for some time,” he said.

New forecasts from the World Bank paint a gloomy picture for the global economy, with growth around the world for 2023 now expected to be just 1.7 per cent, down from the 3 per cent predicted six months ago.

The bank warned the global economy was so fragile, events including a COVID resurgence or increased geopolitical tensions could push it into recession.

Chalmers said Australia’s economy was also facing threats from ongoing natural disasters, as well as shocks including the war in Ukraine.

“We should be optimistic about the future of our economy and our country but realistic about what the deteriorating international outlook means for us in Australia,” he said.

Opposition finance spokeswoman Jane Hume said households were paying the price for the government’s inaction on tackling cost of living pressures.

“This government was elected on a promise to lower the cost of living, and they assured Australians, time and time again, that they had a plan. Instead, we’ve seen inflation continue to rise and no plan from the government to tackle it,” she said.

ABS head of price statistics Michelle Marquardt said November’s increase in inflation was mainly driven by housing, food, transport and furniture. Housing inflation, at 9.6 per cent, was affected by higher labour and building material costs, while increased prices for takeaway and restaurant meals drove food inflation up by 9.4 per cent.

That high and rising inflation has not stalled retail spending. Australians eager for shopping deals in the Black Friday sales helped drive retail spending to a new high, increasing by 1.4 per cent over November, separate ABS data showed. It’s the 11th consecutive monthly rise in retail spending, taking the annual growth to 7.7 per cent.

But spending on categories not included in the sales slumped. Turnover in food retail, cafes, restaurants and takeaway food recorded just a 0.1 per cent rise over November, the weakest increase for those categories for 2022.

Indeed’s Asia-Pacific economist Callam Pickering said while November may prove to be the last hurrah for shopping, household spending has proven more resilient than the Reserve Bank had anticipated.

“In response, the RBA will have little choice but to hike rates, with a further 50 basis points likely in the first half of the year,” he said.

The bank lifted rates from a record low of 0.1 per cent to 3.1 per cent last year, and the board has been considering a pause in rate hikes in coming months as previous increases take effect.

EY chief economist Cherelle Murphy said there were factors affecting the inflation data including the return of the full fuel excise, and the figure was still below the Reserve Bank’s expectation of 8 per cent by the end of 2022. But a tight labour market could put more pressure on wage growth, and China’s reopening could stoke global inflation.

“The RBA’s 2022 rate hikes were designed to tame inflationary pressure, but there are too many upside risks that will force the RBA’s hand further. It will continue to raise interest rates to cool the economy in the first months of 2023,” she said.

Early data on retail spending over Christmas indicates Australians bucked the burden of higher interest rates to spend freely, but economists are questioning how much of that increased spending is just higher prices versus a resilient consumer.

Data from Westpac shows that between November 1 and December 24, retail sales were up 8.6 per cent compared with the same period in 2021, while Boxing Day sales jumped 15.3 per cent to surpass $1.2 billion.

Rival bank NAB is yet to crunch the numbers on retail spending for the full month of December, but chief economist Alan Oster is highly sceptical of claims about a bumper Christmas season for retail, given weaker spending data in the first weeks of December after Black Friday sales.

“My suspicions are that it’s not great – not because they haven’t spent a lot of money, they have, but whether it’s more than they would normally spend,” Mr Oster said.

“There have been big increases in prices, so in real terms I think [consumer spending] has almost certainly going backwards.”

After the November Black Friday sales, NAB’s data showed that spending was soft in the second and third weeks of December.

“What we know is a lot of the money that probably got spent for Christmas was spent in Black Friday,” Mr Oster said.

Lower savings

NAB will release its retail spending figures in the middle of next week and Mr Oster expects the impact of rising interest rate rises will be “quite aggressive” this year.

His comments mirror those of economist Frank Shostak, who previously told AFR Weekend the 2023 Christmas shopper had lower savings after central banks’ money printing, and would be shopping at the expense of the future. He tipped retail sales would fail to match previous years.

The economists are joined by retail analysts, who have issued downgrades on retail stocks like JB Hi-Fi and Harvey Norman and grown wary of discretionary retail as cost-of-living pressures force shoppers to tighten their belts. Investors are also expecting retailers’ margins to be squeezed as input costs go up, especially for businesses that fail to exercise pricing power – their ability to increase prices in line with costs, to protect profits.

The Australian Retailers Association, which also uses Westpac data, has said pre-Christmas trading was $74.5 billion this year – a record, and 8.6 per cent higher than 2021. It has predicted post-Christmas retail spending to tally up to $23.5 billion, also a record and 7.9 per cent higher than the previous year.

However, its chief executive Paul Zahra acknowledged price increases were hidden in the headline numbers and that cost-of-living pressures and potentially slimmer margins for retailers could emerge in the interim reporting season.

“Some analysts have said, and I broadly agree, that up to two-thirds of increase [in Christmas retail spending] was due to increase in prices and a third was the increase in volume. The sales increase may not be what RBA would like to see, but people have continued to spend and celebrate December as a season of indulgence,” he said.

Retails report strong sales

Mr Zahra said it was too early to say if retail spending data for November, December and January put together (to eliminate skews such as Australia’s newfound love for shopping early for Christmas) would surpass previous years.

However, he expected it would come out higher. This would be followed by a slowdown in spending at some point in 2023, he said.

Anecdotally, retailers have reported strong sales.

Barbeques Galore chief executive Angus McDonald said summer was outperforming the same period 12 months ago, driven by a combination of price increases and higher volumes thanks to new product launches.

“Since Black Friday we have continued to see double-digit growth. That has continued all the way through December and into early January,” Mr McDonald told the Financial Review.

He noted that while the supply challenges of 2021 have largely eased, consumers are more discerning.

“Last year if you could get stock then you would be doing well,” he said. “This year it’s actually now back to delivering a good retail experience and delivering good value to customers.”

Mr McDonald noted that with the jobless rate steady at a 48-year low of 3.4 per cent, consumers still had money to spend.

“Even though there’s obviously uncertainty in terms of consumer sentiment, people still have jobs. “If they’re passionate about something and they’re excited about the product and excited about what that means for them and their lives, there’s still plenty of opportunity for retailers.”

‘Older demographic remains strong’

Chris Kahi, the owner of Sunshine Coast-based apparel retailer Old Man Strength, was surprised by the strength of sales during the festive season.

“We’ve seen amazing sales over the Christmas period. We had originally forecast that the period would be soft due to interest rate rises and uncertainty. This has not been the case,” Mr Kahi said.

“Customer feedback and sales analysis suggests that the older (over 40) demographic remains strong. We are expecting to see Q1 2023 maintain this growth.”

Data from payment technology business Square found that both the number of transactions and the overall spend at Australian retailers using its technology increased during the Christmas period of 2022, compared with the previous year. The number of transactions grew by 29.4 per cent, while the total dollar amount spent was up 23.6 per cent.

Square does not disclose how many retailers it has in Australia, and the data is also influenced by an increase in the number of customers the company added in 2022.

“A lot of analysts expected consumers to dampen their spending this Christmas period, but based on our data it looks as though Aussies have continued shopping during this critical time of year for retailers,” said Ara Kharazian, research and data lead at Square.

“When looking at the data across all industries during the Christmas period, we saw record-breaking sales and growth that suggests continued strong consumer spending.”

Luxury fashion conglomerate LVMH has appointed Pietro Beccari and Bernard Arnault’s daughter Delphine Arnault as new CEOs for its two flagship fashion houses, Louis Vuitton and Christian Dior Couture, respectively.

The appointments mark the luxury empire’s most significant organisational changes in its history. 

Pietro Beccari, who has led Christian Dior Couture since 2018, will succeed Michael Burke to become chairman and CEO of Louis Vuitton. Subsequently, Delphine Arnault will head Christian Dior Couture as the brand’s new chairman and CEO after having served at Louis Vuitton as executive vice president since 2013.

Beccari joined LVMH as executive vice president of marketing and communications for Louis Vuitton before being appointed as chairman and CEO of Fendi in 2012. 

“Pietro Beccari has done an exceptional job at Christian Dior over the past five years. His leadership has accelerated the appeal and success of this iconic Maison,” said Bernard Arnault, chairman and CEO of LVMH.

Meanwhile, Delphine Arnault has been executive vice president of Louis Vuitton since 2013, overseeing all of the house’s product-related activities. The French businesswoman is also a member of the LVMH Board of Directors and the Executive Committee. 

“Under her leadership, the desirability of Louis Vuitton products advanced significantly, enabling the brand to regularly set new sales records. Her keen insights and incomparable experience will be decisive assets in driving the ongoing development of Christian Dior,” Arnault added.  

Meanwhile, Michael Burke will take up new responsibilities, reporting to the LVMH’s chairman. 

“He has extended Louis Vuitton’s lead over competitors and promoted the heritage of Louis Vuitton while anchoring it in modernity,” the chairman said. “I am delighted that Michael will continue by my side to share his experience and talent for the benefit of our companies.” 

In addition to the two major executive appointments, executive VP of Christian Dior Couture Charles Delapalme will take on new role as the label’s new MD and work closely with Delphine Arnault. 

Meanwhile, Stephane Bianchi, chairman and CEO of the Watches & Jewellery Division, will now also oversee Tiffany and Repossi. 

The management reshuffle follows the latest appointment of Bernard Arnault’s eldest son Antoine Arnault as CEO of family holding company Christian Dior SE a month ago. 

Last month, Italian fashion group Prada named former Luxottica chief Andrea Guerra as its new CEO to ease a transition at the helm to the next generation of the founding family.

Specialist baby goods retailer Baby Bunting says softer than expected sales in the key December trading period led to its 59 per cent slump in half-year profits, despite core nursery categories doing well.

In a statement to the ASX on Monday, the company booked a 6.6 per cent growth in sales for the half to $254.9 million, but net profit after tax came in at $5.1 million, compared with $12.5 million last year.

Chief executive Matt Spencer had flagged in October that Baby Bunting’s gross margin had declined in the first quarter of 2023 for reasons including moving more of its products to its “every day low price” policy, as well as higher input costs like freight fees increasing.

The group’s loyalty program had also affected margins in the first quarter as customers redeemed rewards at a higher rate than the company had expected. The business has since tweaked the terms of the program.

On Monday, Spencer told investors that reductions in international shipping rates would help margins in the second half. However, he noted that the company’s overall half-year result was affected by “the combination of lower gross profit margin for the half and softer than anticipated sales in December”.

The company said in its announcement lodged with the ASX that the group’s sales growth in the second quarter was “below Baby Bunting’s expectations towards the end of the quarter”.

Spencer said must-have baby goods had continued to perform well over the half.

“Our core nursery categories, which are less discretionary such as car safety, prams and feeding, continued to perform well through the half and are an important part of Baby Bunting’s future growth,” he said.

The retailer’s profit numbers were also impacted by costs related to setting up its New Zealand business, where Baby Bunting is working towards opening 10 stores.

The company is expecting conditions to improve in the second half, and is guiding to full-year net profits of between $21.5 million and $24 million.

A UBS consumer spending survey released on Monday showed very young and older shoppers were best placed for spending in the current environment. Those in the middle with large mortgages and dependents were under the most pressure, the data suggested.

“Middle-aged consumers have the greatest spending burden and are more exposed to household debt,” analyst Shaun Cousins said in a note.

Baby Bunting declined by close to 12 per cent during Monday’s sesssion to sit at $2.67 just after 2pm.

Other retail brands fared better, with Supercheap Auto and Rebel owner Super Retail Group sales had jumping by 15 per cent across its brands for the first half.

Chief executive Anthony Heraghty said the business had delivered an outstanding first-half result, led by camping gear brand Macpac, where sales were up by 55 per cent.

Heraghty said the strong trading over the Black Friday and Christmas sales periods had driven the company to a record sales performance in the first six months of 2023.

The group will report its audited half-year numbers in February. Super Retail Group shares hit highs of $12.60 during Monday’s session, a gain of 10 per cent.

It’s 12pm in Sydney’s central business district, with only four days to go until Christmas, and shoppers seem to be in short supply.

There’s a long queue outside Haigh’s Chocolates on George Street and a longer one outside luxury retailer Hermes a few streets down.

But most people crossing the retail hotspot of Pitt Street Mall are visibly missing the tell-tale pre-Christmas shopping bags on their arms.

“For the kids, it’s just one big present and a few other smaller things on the side,” says Brooke Weston, who’s just been to Zara, Culture Kings and Foot Locker.

“Probably a bit more conscious on the spending this year because we don’t want to go over the top given the climate. It just feels a bit unusual to be spending more.”Over at the Queen Victoria Building, Tim Gurto, a computer programmer and Ella Zmudzki, a product manager are off work and dressed up for an afternoon of Christmas shopping. The haul so far is iPhone stands for Zmudzki and a tie for Gurto.

“I don’t think mine’s been affected that much compared to last year,” says Gurto.

“Australia seems to be doing fairly OK compared to other countries. We were just in the US and everything is much worse there – clothing, food, cocktails which once you add up everything are $40,” he said.

Weston and Gurto – one sombre, one upbeat – are typical of shoppers who retailers (and their investors) have been trying to get a read on in the lead-up to the Christmas period, which can account for two-thirds of their sales for the whole year.

Also upbeat is The Australian Retailers Association, which is tipping Christmas retail sales (November 1 to December 24) to be 6.4 per cent higher this year at $66 billion, including apparel, household goods, restaurants and others. It reckons inflation will weigh on retailers’ margins and spending, but not until next year.

Economist Frank Shostak disagrees. He thinks the 2022 Christmas shopper has lower savings after central banks’ money printing in recent years, which he thinks has also left businesses confused.

“I doubt that retailers can have a stronger period than last year. Obviously, surprises can happen, but people are poorer and if it happens, it will be at the expense of the next year in a big way.

“It would be totally irresponsible. It’s like somebody with little money, goes to buy Mercedes and nice luxurious stuff and he doesn’t have money enough for food and can die of starvation,” Shostak said.

Fund manager Richard Ivers, who can invest in ASX-listed retailers from his fund at Prime Value Asset Management, has a similarly pessimistic view of shopping appetite.

He went defensive on retail early in the year, keeping small allocations to kitchen appliance-maker Breville and beaten-down stock Hello Travel.

“We are hearing retail [was] strong up to a month ago [but we are] not sure about the last three weeks,” Ivers said.

“Our concern heading into 2023 [is there are] some early signs the economy is softening and rate rises continue to pressure household cashflows, and so we don’t want to be holding highly discretionary names.

“Retailers have benefitted from strong demand and less discounting – which supports margins. Both could reverse in 2023,” he said.

Brick-and-mortar’s hot, e-commerce slowing

Without a crystal ball and with most Australian retail giants publicly listed and gagged on sharing bellwether pre-Christmas sales data, smaller retailers are investors’ best bet for getting a read on the spending this year.

Suitcase seller July straddles the retail-travel divide and is a direct beneficiary of travel reopening, but its shoppers often make a purchase months before they are due to travel.

Its co-founder Athan Didaskalou says its customers are usually fashion-conscious women making between $100,000 to $250,000 a year, and they seem to be doing just fine.

“I don’t think rate rises are affecting their appetite. I know discretionary retail should be afraid of inflation. But by the time they come to us to buy luggage, they’ve already spent $3000 to $4000 on things like tickets and flights.

“People are just a little sceptical of what they see in the news. They just want to get on with their lives,” Didaskalou said.

He says July’s brick-and-mortar stores are pumping, making up 32 per cent of November sales (compared to 10-15 per cent last year) as shoppers head out and try to skip the Australia Post delays. Supply chain issues haven’t been a problem, although it had to compete for production slots at factories with other businesses building up inventory.

Staffing has normalised and costs of shipping containers are back to $8000 to $10,000 each, which is higher than $2000 to $3000 before the pandemic but still half of the $20,000 odd retailers had to stump up last year.

For shoppers that do splurge this year, shirts and skirts online retailer Ozsale is seeing a similar preference for brick-and-mortar over e-commerce.

“It’s been a bit of a 180-degree turn this Christmas period. Right now, they want to go out. E-commerce will continue to grow, but it’s just going through a funny period now,” OZsale chief executive officer Kalman Polak said.

Polak says there’s no doubt cost of living pressures, including servicing mortgages, are weighing on shoppers’ minds. Things they wouldn’t have thought twice before buying in the pandemic have become a conscious decision to be pored on. Meanwhile, retailers will have to think about cost pressures of their own.

“Last year it was about getting a handle on the stock. This year supply has not been a problem at all but the big challenge is keeping prices in check, from everything like purchasing automation for warehouses to Australia Post deliveries,” he said.

“If I think of 2023, retailers will be tightening their belts a lot to combat the costs. As a result, we may see lay-offs.”

The COVID pandemic has given us new words, record-low interest rates and the largest explosion in government debt outside of World War II - and is continuing to upend the way Australian households spend their money.

An update by the Australian Bureau of Statistics to the way it tracks inflation shows that almost three years after the start of the pandemic, consumers continue to spend more of their weekly budgets on everything from hairdressing to cavoodles while new shoes and books are left on the shelves.

Every year, the bureau reviews the nation’s collective spending patterns to help it accurately weight the various components of the basket of goods and services that are tracked to determine the rate at which consumer prices are changing.

Traditionally, changes in the spending patterns of Australian households occur gradually.

When the bureau first compiled its measure of what was described as the “interim retail price index” in the late 1940s, food accounted for 31.2 per cent of the total spending basket.

Meat made up 8.7 per cent of the basket while dairy products - milk and cheese - accounted for 8.2 per cent. Housing’s share of spending was 11.6 per cent, just a little more than the 11 per cent that households devoted to alcohol and cigarettes.

In its 2017 update, spending on food and non-alcoholic drinks accounted for just 16.1 per cent of the inflation basket. Meat and seafood had fallen to 2.2 per cent while dairy products were down to less than one per cent.

In its stead, expenditure on housing - which includes utilities such as electricity - had grown to 22.7 per cent.

Then along came COVID. By 2020, as the country began a nationwide housing frenzy due to record-low interest rates, housing accounted for 24 per cent of the entire inflation basket. Food spending, which lifted during the COVID lockdowns of the period, increased to its highest proportion since the turn of the century to 17.4 per cent.

In its most recent update, the bureau reports food has edged down from its 2020 pandemic hoarding highs but Australians are still putting more of their weekly grocery bills towards such things as beef, chicken, milk, coffee, soft drinks and vegetables.

Eating out, be it in a restaurant or via takeaways, is now at its highest share of our weekly spending since the bureau started officially measuring this sector in the mid-1970s.

As a proportion of the inflation basket, eating out accounts for 6.81 per cent of total spending. That is an increase of 16 per cent over its pre-pandemic level and a bigger share of our expenditure than petrol (3.6 per cent), domestic holidays (2.4 per cent) and electricity (2.2 per cent).

Our spending patterns changed in other ways. The surge in lockdown pets, and their associated veterinary bills, means the proportion of our spending devoted to furry friends and their health needs is 28 per cent above its pre-pandemic levels.

Expenditure on clothing is 11 per cent up (although the share devoted to shoes is down by 11 per cent), the share of our spending devoted hairdressing and personal care is up by 16 per cent while health spending is 16 per cent higher.

To make way for this extra spending, the proportion we devote to other goods and services has fallen. The biggest drop has been on transport fares, down 53 per cent on 2017 levels while the share devoted to the cleaning, repair or hire of clothes has dropped by 42 per cent.

International travel came to a standstill when the Morrison government closed the borders. Despite surging by 2213 percent from its 2020 level, the share of expenditure devoted to overseas trips is still down 41 per cent on its pre-COVID level.

AMP senior economist Diana Mousina said COVID and its restrictions on our way of life had changed our spending patterns which were now reflected in the inflation basket used by the ABS.

She said spending should return to pre-pandemic patterns, but it was taking longer than expected and could change even more as higher interest rates start to bite.

“We’ve seen the price of goods go up and that’s contributing to the inflation we’re seeing. I think services are going to return as spending on goods falls back as interest rates continue to rise,” she said.

“Retail spending remains at elevated levels, and you can see that in the inflation figures, but over time it is going to come back a bit and we’ll see that in a change in our spending patterns.”

While housing’s share of the inflation basket reached an all-time high in 2020, it has now fallen below its pre-pandemic level.

The bureau does not include house prices in its measure of inflation, but takes in rents, utilities and costs associated with purchase of newly built homes.It said that while spending on rents had grown over the past two years, total expenditure across all goods and services had grown by more. Electricity consumption has also dropped which, combined with rebates offered to households by some states to offset surging prices, had pushed down its share of the inflation basket.

The online furniture and homeware retailer announced last week it had fallen into voluntary administration, today Kogan.com has revealed it has purchased the company.

Kogan.com has purchased the Brosa business out of administration. The company is reporting Brosa was purchased at $1.5 million, and additional logistics support for thousands of customers with undelivered orders. This purchase includes the assets of intellectual property, goodwill and stock, and excludes all leases and other liabilities. This means Brosa joins Dick Smith, Matt Blatt and Mighty Ape in the Kogan Group to expand the Kogan Group’s furniture offering. According to this morning’s media release, Brosa.com.au will eventually relaunch with expanded range and value under the new owners. The purchase was funded from Kogan’s cash reserves.

Last week, the company was placed into voluntary administration following a rough year in the wake of a pandemic sales boom that failed to maintain momentum. The administration was overseen by Richard Tucker and Michael Korda of KordaMentha. The administrators expected a strong interest in the company, and announced that around 30 investors had approached them, just days after the company was placed into voluntary administration.

“The acquisition of Brosa by Kogan will broaden the online furniture offering of the Kogan Group, providing unprecedented range and value to Brosa customers, while also expanding the range of furniture and homewares available to Kogan customers,” said Kogan.com COO and CFO David Shafer. “We are pleased to be able to offer a lifeline to Brosa customers, to be able to save the Brosa brand, and to relaunch Brosa.com.au very shortly. Following years of investment in brand-building and marketing, Brosa is a well known online furniture brand in Australia, and we are delighted to be able to bring the brand within the Kogan Group.”

KordaMentha has this morning released a statement that Kogan.com had emerged as the successful bidder. “Kogan.com is a white knight for the business and particularly customers who are awaiting delivery of orders where the stock was held by Brosa. Unfortunately, the Administrators were unable to fulfil these orders due to  challenges in the logistics network. Kogan.com is providing a great outcome for customers to get their product where possible and subject to commercial arrangements.”

Kogan.com intends to continue to operate www.brosa.com.au and offer delivery for customers who have already paid, where Brosa has the product in stock. In the announcement last week, the administrators claimed that this would likely be the case.

Mr Tucker said the priority for the Administrators now is to pay employees as soon as possible. He thanked the employees who had assisted the Administrators in extremely difficult circumstances. “The sale of Brosa is a fantastic outcome for the creditors of Brosa,” Mr Tucker said.

Riding a wave of momentum of the back of this year’s “Freedom Christmas”, retailers are now facing a nervous wait for the tide to turn.  

You don’t need to be a clairvoyant to gauge that a period of uncertainty lies ahead for households and businesses as the inflationary pressures increase in 2023.  

Retailers have done a phenomenal job fortifying ahead of the metaphorical long winter. Our forecasts for the all-important Christmas trading period had sales at a record and the new year’s transition certainly hasn’t dampened the appetite for shopping- most celebrating their new-found liberties after three challenging years living with a pandemic.   

Post-Christmas sales are projected to notch another record of $23.5 billion, up 7.9 per cent.  

But the adage of calm before the storm may ring true here – with many economists flagging a widespread economic slowdown at some point in 2023.  

Tumultuous economic conditions certainly aren’t unchartered waters for retailers. They have been in a permanent state of disruption and rolling with the punches particularly through the pandemic.  

Pleasingly, CBD retailers who were hardest hit are saying weekends are back to pre-pandemic levels and some weekdays are slowly recovering – predominantly suffering from the segue to working from home. 

The CBD retail machine has been permanently disrupted – now requiring a new strategy to attract shoppers who are not workers.  

The key is in the ideation of a 24-hour economy and shifting focus from day to night. Twilight hours are important to ensure it’s a full experience. Indulging the five senses is key. Go for lunch, shop, stop to recharge with a coffee and top it all off with a live performance or show onto dinner and possibly a club or bar afterwards. Take in the sights and sounds that only a city can provide.  

Shopping remains Australia’s favourite sport and the resilience of travel retail in particular, is a great modern-day Rocky tale. Some experts declared travel agencies, holidaymakers and the like would be down for the count. But slowly and surely, they’re getting back up.  

There are still challenges; holiday costs are at a premium and some travellers are wary of a COVID-derailed itinerary – but for the most part, the sector has slipped the jabs thrown their way with prowess.  

The playing field for hairdressers and beauty therapists has also changed. They’re running a team relay race, but the fourth runner is nowhere to be seen. The biggest hurdle for this sector is a crippling shortage of talent, exacerbated by the lack of foreign workers- labour shortages lingering from the pandemic.  

The Australian Retailers Association (ARA) has been sounding the alarm on labour shortages throughout 2022 and we must see this addressed in 2023 to allow a true economic recovery.  

The ARA has championed change in this area – successfully advocating for the extension of extended international student working hours, the introduction of the mature worker tax incentives and a national approach to minimum age workers. There isn’t necessarily one silver bullet fix for labour shortages, but rather the need for a multifaceted approach.  

We are calling on the government to diversify the workforce by removing barriers to participation, streamline immigration processes, invest in skills and connect jobseekers to employers through vocational training and pathways to secure jobs and simplify and modernise the award system, creating flexibility to benefit both employees and employers. 

The reality in our own Back to the Future, in 2023, is very different from that of which we would have anticipated even just four years ago.  

We can’t hit the Flux Capacitor and turn back the clock. We need to adapt to change.  

The pandemic accelerated trends that were already occurring in the industry. The move to online shopping and the need for the shopping experience to both be seamless and contactless have been profound. It’s a known fact that crises drives innovation- the adoption of click and collect, the creation of direct to boot and the love of shopping cashless continued to be embraced by shoppers.   

The pandemic also reversed some trends. The move from globalisation to localisation with more manufacturing being considered locally to sure up supply chains. Buying and shopping local has rarely been more coveted.  

The stars may have fortuitously aligned during the pandemic, but much like astronomers, the industry is staring down a vast of the unknown. 

We are working and hoping as an industry that the universe will provide, but the word on the street is ‘batten down the hatches’.  

Winter is coming – but another Spring will be just on the horizon.  

Australians could be nursing a new year hangover from frenetic Christmas spending at department stores, cafes and restaurants, with some analysts viewing the big increase in retail spending as the last hurrah before the reality of higher interest rates and spiking energy bills hits households.

While the Reserve Bank will not be meeting in January, back-to-school costs, rising mortgage payments and higher energy bills will start to flow through to household budgets soon, likely bringing to an end the run of pre-Christmas consumer spending.

The latest data collected by the Australian Retailers Association and Westpac shows a festive season spending splurge that defied all expectations, reaching a record-breaking $74.5bn – up 8.6 per cent on last year.According to figures from the ARA in partnership with Westpac DataX, Boxing Day trading also recorded unprecedented growth – up 15.3 per cent from last year – to a massive $1.23bn spend for the day.

While economists believe that about two thirds of that higher spending can be explained by rising inflation – meaning we paid more for the same goods and services – there was also a lift in the volume of purchases by consumers heading in to the new year.

“This is without a doubt the biggest festive season spend on record – it is unprecedented,” said ARA chief executive Paul Mr Zahra.

“It is remarkable that in this ­period of economic turbulence, traders have well and truly smashed it out of the ballpark as consumers revelled in ‘freedom’ spending,” he said.

“An unrivalled $74.5bn spend leading up to Christmas still didn’t diminish the spending appetite of Aussies leading into the year’s marquee retail savings event.

“The past three years have been incredibly challenging for everybody – and retail traders were certainly no exception. The resilience and agility of the industry has been remarkable.“The success shared by department stores, in particular, is truly outstanding, defying many predictions by commentators.”

Mr Zahra said according to the data collected by Westpac, department stores drove the greatest sales growth on Boxing Day – up 23.6 per cent on last year – to reap $149.4m. Cafes, restaurants and takeaway food services were up 22.8 per cent, and clothing and ­apparel were up 19.8 per cent.

Mr Zahra said Boxing Day in particular was about “saving money” and could reflect a growing concern among households as they enter the new year and face tightening budgets due to interest rates, energy and the cost of living.

“Boxing Day has different dynamics; Boxing Day is about saving money,” he said.

“So if you think about it, people under household budget pressure are saying well actually, what do I need that I can buy at a discount now and save some money.”

Jade Clarke, the head of Westpac DataX, said spending remained strong despite the rising cost of living: “The data shows that despite a year of increasing living costs, Australian retail sales have remained strong over the holiday period, improving on last year.”

Sydney’s Pitt Street Mall was bustling on Thursday with shoppers eager to snap up discounts in festive season sales, hoping to beat the inflation crunch.

Psychology student Anne Hollerich said she had splashed some Christmas cash, but admitted she had not paid much attention to inflation until she looked to book flights home to see her family in Luxembourg for Christmas.

“It cost so much – thousands and thousands – to get home; it was just too expensive,” she said, so she is now spending new year in Sydney and her first festive season away from home.

New shoes, pyjamas, and beauty products were popular items snapped up by shoppers, with some saying they were getting their shopping done now before they face higher prices back home.

But for mother Chantelle Potgieter, shopping with her daughter Megan, 16, she can already feel the inflation crunch. “Every time I go to shop for groceries it costs 30 per cent more, no matter how I try to plan it,” she said. “I might not be thinking about it while we’re out spending Christmas money now, but you can tell it (inflation) does already have an impact.”

When Vivienne Westwood, who created the torn tartan coattails the Sex Pistols rode to punk stardom in the seventies, accepted an OBE from Queen Elizabeth in 1992, her ability to confound expectations peaked.

To be fair, it wasn’t a complete curtsy to the establishment. She wasn’t wearing knickers (Westwood, not the Queen) for the ceremony, or to collect her damehood in 2006.

Westwood’s legacy as a designer and trend oracle is much clearer, following her death, aged 81.

The daughter of a factory worker and cotton weaver, she rose to notoriety clothing punks in torn T-shirts with pictures of the Queen with her lips safety-pinned, swastikas and bare breasts from her store on London’s Kings Road provocatively called Sex, later renamed Seditionaries, before becoming World’s End. Strangely enough, what followed was far more interesting.

Focusing on fashion in her forties, following her disillusionment with punk, Westwood mined galleries and literature for trends that continue to infiltrate the collections of her peers, evident from her first runway show in 1981 for the Pirates collection.

Those conical bras that made Jean Paul Gaultier a star in 1987 and became the uniform of Madonna’s Blonde Ambition tour, are pointedly apparent in Westwood’s Buffalo collection of 1982.

Controversial designers Dolce & Gabbana built an empire and Kardashian client base on corsets, revived by Westwood in 1991. Mini-crini’s from a 1985 runway show packed with dishevelled Marie Antoinettes turned up the volume for the pouf skirts that followed from Christian Lacroix.

“Vivienne Westwood’s contribution to fashion is unique, perhaps unparalleled,” British fashion journalist Alexander Fury writes in Vivienne Westwood: Catwalk. “She is certainly the most important fashion designer of the latter quarter of the 20th century.”“Our appreciation of every fashion designer today, how the fashion world is today, how we view fashion, is different because of Vivienne Westwood,” milliner Stephen Jones told Another Magazine in 2017. “And that goes for John Galliano, Alexander McQueen, Rei Kawakubo, Martin Margiela – everybody has been influenced by her.”

Westwood’s talent was often obscured by a love of stunts, almost greater than that of her ex-partner, Sex Pistols promoter Malcolm McLaren. There was her 1989 Tatler magazine cover as a disturbingly convincing Margaret Thatcher, sending Naomi Campbell down the runway in 1993 in platform shoes that toppled the supermodel like a wounded giraffe and that confident twirl outside Buckingham Palace in 1996 that amply revealed her disdain for underwear.

Often these stunts were staged to promote causes, such as her commitment to climate change and nuclear disarmament. Westwood also took the counterintuitive move of encouraging customers to buy fewer clothes.

The protests didn’t get in the way of a push for profits by the independent business, with Westwood designing the cabin uniforms for Virgin Atlantic airlines, collaborating with Burberry in 2018 and more recently Asics sneakers. Westwood also designed the extravagant dress worn by Sarah Jessica Parker as Carrie Bradshaw for her aborted wedding in the Sex and the City movie.

Since Paris Fashion Week Autumn-Winter 2016, Westwood’s creative partner and husband since 1993, Andreas Kronthaler, designed the runway collections, refining the label’s language of tartans, pirate paraphernalia, corsets, platforms, heart-shaped lapels and meringue silhouettes.

Kronthaler, 56, who met Westwood as a student, also picked up on Westwood’s rebel spirit. The brand was accused of plagiarism in the autumn/winter 2017/18 collection. T-shirts with the slogan “We do big sizes! 2XL 3XL 4XL 5XL!!!! We do very small sizes!!” had been lifted from designers Louise Gray and Rottingdean Bazaar.

A statement appeared on the brand’s social media in 2018 saying: “We are sorry. The use of your graphics on our T-shirt was only ever meant to be a celebration of your work. We got caught up in a last-minute frenzy and did not contact you to ask for your permission. We are truly sorry about this mistake and want to make it up to you.”

The apology only deepened Westwood’s reputation as a responsible rebel.

In a statement, Kronthaler made it clear that he will continue Westwood’s work.

“I will continue with Vivienne in my heart,” Kronthaler said. “We have been working until the end and she has given me plenty of things to get on with.”

Westwood also maintained her contradictions until the end.

“I don’t even like fashion,” she said in an interview with NME in May. “Well, sometimes I do.”

Department stores and the foodservice sector drove “unprecedented” Boxing Day sales growth across Australia according to data from the Australian Retailers Association and Westpac DataX. 

And the ARA says the data shows pre-Christmas spending hit a record $74.5 billion – 8.6 per cent ahead of last year, a figure that “defied all expectations”. 

“This is without a doubt, the biggest festive season spend on record – it is unprecedented,” said ARA chief Paul Zahra.

On Boxing Day, Australians splurged $1.23 billion – up 15.3 per cent on 2021, with department-store sales of $149 million up by 23.6 per cent and the restaurants, cafes and takeaway food sector accounting for $124 million, up by 22.8 per cent year on year. 

Spending on household goods accounted for the highest share on Boxing Day, reaching $314.76 million, up by 14.3 per cent, followed by food and grocery retailing, up by a more modest 7.6 per cent to $264.52 million. 

Spending on apparel and accessories surged 19.8 per cent to $217.59 million. 

Prior to Boxing Day, there were some concerns in the retail community that higher-than-expected pre-Christmas spending combined with the impact of inflation and interest rates onc consumers’ discretionary spending might mute the traditional Boxing Day splurge-fest. 

But Zahra said the unprecedented pre-Christmas spending did not diminish the spending appetite of Aussies leading into what he described as the year’s “marquee retail savings event”.

“It is remarkable that in this period of economic turbulence, traders have well and truly smashed it out of the ball park as consumers reveled in ‘freedom’ spending. The last three years have been incredibly challenging for everybody – and retail traders were certainly no exception. The resilience and agility of the industry has been remarkable,” he said.

“Boxing Day has once again cemented its status as the Grand Final of Australia’s favorite sport, shopping.”

He said multiple elements drove the record spend, including a sense of ‘reward’ after the challenging period brought by Covid-19 and restrictions on movement and shopping. He also believes many Australians were motivated to buy now ahead of price rises driven by inflation – “and leverage savings during the sales events”. 

Westpac DataX used de-identified card-spend data to calculate the spending figures and provide insights during the key trading time.

“The data shows that despite a year of increasing living costs, Australian retail sales have remained strong over the holiday period, improving on last year,” said Jade Clarke, head of Westpac DataX.