The latest retail industry data reveals that consumer spending patterns are shifting after a strong period of growth for non-food retailers, and particularly for large format retailers.
At the recent Large Format Retail Association (LFRA) Conference in Melbourne, Citibank reported that non-food retail sales have outperformed food sales for the first time in 15 years.
Overall, Australian retail spending has been tracking at 3.7% growth over the past 12 months – compared with the 20 year average of 5.3% - with the largest sectors being liquor (4.9%), clothing stores (7.2%) and hardware (6.7%).
According to Citibank, although retail spending has been trending lower over the past 12 months, major large format retailers including JB Hi-Fi, Harvey Norman, Nick Scali, Baby Bunting, Bunnings and Beacon Light are all outperforming this slowing category by achieving consistent sales growth.
Significant factors have been attributed to the retail market slow down, including record low wage growth and rising mortgage rates.
While Australia is currently experiencing a more moderate retail cycle by historical standards, there are some encouraging signs for the large format retail sector.
In terms of the outlook for retail sales, the average Australian consumer is neither particularly confident nor concerned, and experts are predicting an increase in retail spending – with national retail sales growth of 5% predicted in 2017.
Realmark Commercial is a proud member of the LFRA, the national peak body representing the interests of large format retailers, investors, owners, developers and service suppliers in Australia.
If you are interested in more information about the retail market, or to discuss your commercial property needs, please contact the Realmark Commercial team on 08 9328 0999 or visit http://commercial.realmark.com.au/
Source: LFRA Conference February 2017. Recent speakers Craig Woolford, Citibank and Roy Morgan Research