Lower consumer spending hits retailers
Retailing increased by 2% in current value terms in 2013, compared with a CAGR of 3% witnessed during 2013, reflecting the fact that Australians remained cautious about their discretionary spending in 2013 and suggesting that confidence in the economy was weak. Although Australia’s economy continued to perform better than other developed economies, the mining investment boom that fuelled Australia’s economy in 2012 had begun to level out by 2013, creating uncertainty, exacerbated by the fact that 2013 was a federal election year.
Online sales growth outperforms that of the total retail sector
Internet retailing saw the best performance within retailing in 2013. High growth was the result of a number of factors including increased usage of the internet and internet-enabled mobile devices (iPad, iPhone, Android) and increased confidence and familiarity with online payment infrastructure, as well as the development of new online platforms and enhanced user experience. All of these factors encouraged consumers to shop online, which had a positive impact on internet retailing. Consumer appliances and video games hardware saw the fastest growth within internet retailing in 2013.
Consumers’ restrictions in discretionary spending benefit grocery retailers
With consumers carefully watching their wallets, grocery retailing grew by 3% whilst non-grocery retailing experienced a negligible growth in current value terms in 2013. This can be largely explained by consumer preferences in buying more supermarket-brand groceries instead of eating out or buying more expensive branded products from non-grocery retailers. In Australia, grocery retailers generated 51% of retail store-based sales during 2013.
Grocery retailers lead value sales in 2013
The top two brands in terms of value sales in Australia in 2013 were grocery retailers Coles and Woolworths. Due to the economies of scale of their parent companies, Wesfarmers Ltd and Woolworths Ltd respectively, the two grocery retailers led total retail sales in 2013, accounting for 39% of overall retail sales. In 2013 Wesfarmers Ltd was ranked number one in terms of value sales as a result of its strong position in a wide number of channels, which was further enhanced by venturing into new areas, such as home improvement.
Australia’s outlook more positive in the forecast period.
Although the economic outlook in Australia has softened somewhat, consumer confidence and discretionary spending are expected to improve over the forecast period with a positive effect on retailing. This will be the result of lower interest rates, a strong Australian dollar and the change in consumer attitudes towards debt and savings. However, growth projections are still expected to be modest.
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Discover the latest market trends and uncover sources of future market growth for the Retailing industry in Australia with research from Euromonitor's team of in-country analysts.
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The Retailing in Australia market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic number of stores, selling space and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- How big is the grocery/non-grocery/non-store channel in Australia?
- Who are the leading retailers in Australia?
- How is retailing performing in Australia?
- What is the retailing environment like in Australia?
- Which channels are winning or losing in the fight for consumers’ money?
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This industry report originates from Passport, our Retailing market research database.