Australia is one of the most urbanized societies in the world, with about 90% of the population living in the urban areas of Sydney, Melbourne, Adelaide, Brisbane, and Perth, as well as in smaller cities and towns within 100 miles of the ocean.
In the pre-COVID period, the Australian retail sector had been witnessing positive growth, despite significantly low increase in wages and rising household debt. It was impacted by strong growth registered in the housing market, supported by low interest rates and an increase in household credit.
Dynamics of the retail industry are different from other sectors. Although it involves millions of employees and produces trillions of dollars in revenue every year, Retail does not create a product. Instead, retailers purchase products from manufacturers in bulk. Those products are then sold to consumers at a markup.
That Covid-19 has been a very big disruptor of life and businesses is an understatement. The online and multi-channel impacts were vastly being seen across the world on physical retails including malls. The corona scare might change the way to do retail business across the world.
Retail sales in Australia had surged 16.9 percent month-over-month in May 2020, rebounding from a 17.7 percent plunge in the previous month and beating market expectations of a 16.3 percent gain. It was the largest rise in retail trade on record, as a wide-scale easing in COVID-19 lockdowns allowed entire sectors to reopen. Sales increased for all categories: clothing, footwear and personal accessory retailing (129.2 percent vs -53.6 percent in April), cafes, restaurants and takeaway food services (30.3 percent vs -35.4 percent), food (7.2 percent vs -17.4 percent), household goods (16.6 percent vs -0.1 percent), department stores (44.4 percent vs -14.9 percent) and other retailing (9.4 percent vs -14.4 percent). Retailers reported themes of continued spend on home improvements and high demand for recreational goods. (Source: Trading Economics.com, Australian Bureau of Statistics)
Retail sector is most commonly impacted by consumer spending patterns. Unless there is a hit to shopper sentiment due to wage cuts or job losses, we probably do not foresee any dramatic downturn to the retail sector.
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.