Three quarters of retailers are expecting Christmas sales to be higher than last year.

But the gains are tipped to be modest, with no retailers expecting more than five per cent sales growth, and 38 per cent believing growth will be between two and five per cent, the latest Deloitte Retail Review survey shows.

Deloitte Australia national retail head, David White, says record low interest rates and cheap credit are helping to boost consumer spending and retailer confidence ahead of Christmas.

“However, macroeconomic factors – such as weak wages and jobs growth and the slowdown in China – remain the number one perceived risk to retailers, which is why they are expecting a solid Christmas period, but not a spectacular one,” White said.

He says retailers are optimistic about 2015, with a greater focus on organic growth, particularly through bricks and mortar stores and a greater investment in multi-channel offerings.

While expectations around sales growth are cautious, retailers are more confident in their ability to increase profit margins this Christmas.

Almost 50 per cent of survey respondents expect to grow margins during the Christmas period, suggesting the slash and burn discounting seen in previous years is less likely.

“There will still be bargains to be found, as two thirds of retailers have said they plan to discount at some point over the Christmas period,” White said.

“But consumers will need to hunt harder for those bargains or be well connected to what retailers have planned, in order to make the most of the opportunities on offer.”

Meanwhile, 83 per cent of retailers are predicting higher online sales than last Christmas.

The findings are based on a survey of 63 senior executives of leading retailers operating in the Australian market.

The research took place during September and October 2014.

The survey’s release follows Australian Bureau of Statistics figures earlier this week showing shoppers spent $23.6 billion in September, a 1.2 per cent rise from August.

AAP