Cheer for Australian retailers in Boxing Day sales

Tens of thousands of Australian shoppers hit department stores Monday for the annual Boxing Day sales, with ailing retailers hoping to ring up Aus$1.7 billion (US$1.73 billion) in purchases. Australia's resources-driven economy is not in recession and boasts low unemployment but with uncertainty growing Australians have become much more conservative consumers, saving at a rate not seen for 20 years. After a dismal year in retail and a disappointing lead-up to Christmas, in which cold and rainy weather hurt summer fashion turnover, storekeepers were hoping from a boost from the traditional bargain sales. "We're anticipating that the spend today alone will be somewhere in the vicinity of Aus$1.7 billion," chief executive of the Australian National Retailers Association Margy Osmond told ABC TV. Over the week, consumers are expected to spend Aus$5.5 billion, she said. Hundreds of people waited in pre-dawn darkness outside David Jones and Myer department stores in Melbourne and Sydney which opened at 5:00am Monday, while shopping precincts were swarming with crowds hunting for bargains. Australians failed to spend big in November and December, despite interest rate cuts in those months bringing relief to mortgage holders, while the high Aussie dollar has also hurt retailers. But on Monday shoppers snapped up electrical items, homewares and new clothes, and younger consumers hunted for heavily discounted designer fashion items. Retailers view Boxing Day sales as an important indicator of the coming year and the chief executive of David Jones, Paul Zahra, said early indications were that the sales had brought out as many people as last year. "It's pleasing given the tough start to the retail sector this season," he said. But Osmond warned: "We can't mislead ourselves. This is not necessarily going to be enough to spell any kind of recovery for the retail sector who will be moving into their most difficult time of the year, which is the first quarter." In September Australia's top-end department store David Jones reported full-year net profits dropped 1.5 percent, as it warned of difficult trading conditions amid the retail slump.