Itās that time of the year again. Itās the festival of festivals to boost the profits of giant retail stores. The āSpirit of Christmasā demands to be fed with your maxed out credit card.
Thereās a new desperation to this seasonal message this year. The shoppers are not splurging like they should.
A recent Westpac survey found that consumers would spend 34% less in 2010 than in 2009.
Australian Retailers Association (ARA) executive director Russell Zimmerman said: āThis year has been tough for retailers with consumers still suffering from a post-GFC hangover and being very careful about opening their purses and spending on particular items, especially clothing, footwear and bigger ticket household items.ā
But the retailers have a plan to fix this. The ARA said: āRetailers are moving away from the traditional strategy of holding post-Christmas sales, with almost 63% of retailers saying they will hold pre-Christmas sales this year, offering discounts of to 30% on top of other promotions such as product giveaways and two-for-one deals.ā
Oh, cool! We can rush into a shopping centre now and get lots of stuff we donāt really need. And hey, we can put it all on the card, further lifting total Australian credit card debt higher than $50 billion.
Outstanding credit card loans have grown 16% in the past three years to $47.6 billion. $35.1 billion of this debt is accumulating interest and the banks are raising credit card interest rates, even though the average standard credit card interest rate is already 19.6%.
In June, the Melbourne Institute reported that credit cards had overtaken home mortgages as the biggest part of household debt.
Annette Sampson said in the November 27 Sydney Morning Herald: āAfter falling during the GFC, household debt has kicked back up again in Australia, to about 160% of disposable incomes, which is higher than US levels of about 120%ā.
If this has put you off Christmas shopping, here is a way out: Give your friends and family something thatās useful and helps us build an alternative to this capitalist shop-till-you-drop madness. Give them a subscription to Ā鶹“«Ć½ Weekly.
Building the subscription base is the best way to make sure that Ā鶹“«Ć½ Weekly keeps going.
Readers of the column know how hard it is to keep a project like this afloat. Each week I have reported on the struggle to reach our $300,000 annual fighting fund target. As of the end of November weāve raised $205,114. We received $11,347 in the past week. Thank you! Now we are into the final stretch.
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