Australian businesses are indicating that discounting is the required antidote for sluggish spending heading into Christmas, with expectations for selling prices now close to the lowest level in more than two decades. Selling price expectations have fallen by more than 9 points over the past two years and are now at an index of 12.
Dun & Bradstreet’s latest National Business Expectations Survey reveals Australian firms are confident discounting will result in a significant increase in sales over the Christmas period and accordingly, they are preparing to re-stock to ensure they can meet demand.
Forty nine per cent of businesses expect sales to increase over Christmas. The expected sales index is now at 33 up from 11 last year. Meanwhile, expectations for inventory levels have risen to the highest point since 2000, with more than a third (38%) of businesses expecting to boost their inventories to meet anticipated demand – this is a 21 points rise, up from an index of three during the December quarter 2011.
The anticipated reliance on discounting to deliver sales during the December quarter reflects the approach taken by many firms during the June quarter 2012. The selling price index fell nine points to three during the June quarter – the lowest index level since 1997. Concurrently, sales rose to an index of 22, up from an index of five the previous year.
To read the full story click on the attachment: Dun Bradstreet National Business Expectations Survey Oct 1 2012