Confidence in retail sector returns: Illion

Business owners and executives expect the retail sector to improve next quarter, according to Illion’s latest Business Expectations report.

Illion’s retail sector index, a measure of forecasted performance based on the responses of 1200 respondents, is up 44.8 per cent from last quarter and up more than 120 per cent compared to this time last year.

“In recent years, retailers have been hit hard by cautious consumers, weak wage growth, high debt and low savings. It looks like the sector is now bouncing back, driven by record interest rate cuts, a bottoming in the housing price market and a pick up in real wage growth,” Illion chief executive Simon Bligh said. 

“The retail sector – which employs nearly 1.3 million Australians – is a lead indicator for overall economic performance, and if these expectations solidify into actual performance, we could be looking at the beginnings of a very real improvement in economic conditions in the third or fourth quarter of 2019.”

According to the report, all forecasted economic indicators in the retail sector – sales, employment, profits and investment – have improved on a quarterly and annual basis.

Retail expectations index. Source: Illion.

This could be the result of consumers switching back to local options after the addition to GST to international online purchases [earlier in the year], said Illion’s economic adviser Stephen Koukoulas.

“It is noteworthy that online retail sales continue to grow and in May 2019 made up 6.2 per cent of all transactions, up from 5.6 per cent a year earlier,” Koukoulas said. 

“The improved retail forecast supports the RBA’s own expectations of a pick-up in consumer spending and the overall economy in late 2019 and over 2020.”

Despite this, other business sectors are not as positive toward the remainder of the year, with the report finding the overall business index down 4 per cent from the prior quarter, and down 9.3 per cent from the prior year – the lowest point since December 2017.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

Comments

Comment Manually

I have read and agree to the Terms and Conditions and Privacy Policy.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inside Retail Polls

Is the US-China trade war having an impact on your business?
Vote

Twitter

#AlceonGroup announce first Victorian @Lego_Group store to open in @WestfieldAU Doncaster #retail https://t.co/qMfYJp5WFM

4 days ago

Almost half of online marketplace @Kogan gross profit for FY19 came from its private label offering #retail #onlinehttps://t.co/lLwhKBnVp2

5 days ago

Talks of a merger between @OZretailers and @retailaustralia have come to a close, with the parties failing to align… https://t.co/hkqHyDsBkr

2 weeks ago
x

SUBSCRIBE
FREE NEWS BRIEFS Get breaking news delivered