Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Retail sector sluggish as weak growth remains

Growth in the retail sector is expected to slow further, dragged down by the poor performance of food retail.

Despite low interest rates and asset inflation floating the non-food part of the sector, food retail has proven weak, growing by just 0.7 per cent over the year to June 2016, according to a recent Deloitte forecast.

Its estimates indicate the retail sector is expected to slow further to just 2 per cent growth over 2016-17 before recovering the following year.

“Last year, the strong growth in housing activity spurred household goods turnover, while this year is characterised by growth in apparel and department stores,” the Deloitte report said.

Advertisement
Advertisement

“These new growth categories are driven as much by supply side circumstances as they are by demand. Transformation strategies by Myer, David Jones and Kmart/Target, as well as the hype surrounding competitive international fashion entrants have had a huge effect on turnover in these categories.”

However, against a backdrop of a transitioning economy, some states are doing better than others.

“Slowdown in resource rich states (Western Australia, Queensland and the Northern Territory) is contrasted by stronger conditions in the likes of New South Wales and Victoria. That is a direct reflection of the shift from a mining construction boom to a housing construction boom, with the big states of the south and east getting the upside from that baton pass,” the report said.

In an atmosphere of low interest and slow underlying growth, the retail sector is not the only one struggling.

“Share market values have moved up in August despite a lack of equivalent strength observed in profit reports, suggesting that share prices are being driven by cheaper finance rather than better returns.”

 

Retail sector sluggish as weak growth remains
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
TRC Unimpressed - Oh Golly Gosh... What will we do with an extra $15.00 per week??? Maybe buy milk or leave the heater or lights on for an extra 10 minutes. How about.......
Anonymous - The staff at the Workplace Gender Equality Agency as at June 2018 was one of the most discriminatory organisations you can imagine- 90% female (2.......
TRC - Not to mention that the Government has made the a SMSF impossible to manage and totally restricts how you finance an investment. Too much RED TAPE.......
Anonymous - The age pension is a subsidy scheme for inheritance of real estate. The pension should be a charge on the estate - and tax free accordingly.....