Cashed up consumers driving retail resurgence

Retailers to compete for consumers’ dollars as more opportunities for spending open up.

Australian retail spending has surged through most of 2020-21 benefiting from captured consumers who had little else to spend on through the pandemic.

However, those retailers who profited from a restricted economy are likely to face headwinds in this new financial year, according to Deloitte Access Economics’ latest quarterly retail forecasts report.

Report highlights:

Retail spending was relatively soft from January to March, with volumes falling 0.5 per cent over the quarter
Growth in retail spending is expected to reach a hefty 5.9 per cent in 2020-21 – the highest growth seen in a decade, however after such a large surge, the forecast for 2021-22 growth is a more modest 0.9 per cent gain
Non-food industries will likely experience the greatest slowdown in retail spending into 2021-22, especially apparel and household goods retailing
The strong outlook for spending relies on households drawing on any war chest of savings as fiscal stimulus measures unwind and income growth remains muted.

Deloitte Access Economics partner David Rumbens, said: “Australian retailers are set to record a bumper year in 2020-21. Spending options have been limited, and with many households having cash to burn, consumers flocked to retail. This has supported what is likely to be the strongest gain in retail spending in a decade.”

Date Published:

16 June 2021