Qube puts its faith in logistics park

Weak wages rattle retail confidence

THE slump in consumer spending is expected to continue this year as a major headwind for retailers across the country, economists say.

Commonwealth Bank research says weak wages growth is the single biggest factor weighing on the retail sector as households devote more to health, utilities and education.

“Consumers have a fine amount of disposable income and even with the assistance of a falling savings rate, record low wages growth has weighed significantly on the discretionary parts of retail trade,” CBA senior economist Gareth Aird said.

“Soft total retail trade growth is largely down to a lack of spending growth on consumer durables and clothing.”

Mr Aird said demand for clothing and other discretionary goods had been week for the past two years, as reflected in falling department store sales and the collapse of apparel retailers. Herringbone, Marcs, David Lawrence and Pumpkin Patch have all fallen into voluntary administration. LOGISTICS group Qube is tapping investors for $350 million, partly to fund the development of a facility that will handle goods from one of Australia’s busiest ports.

The listed company will use $80 million to pay for the construction of a warehouse at the Moorebank Logistics Park in south west Sydney.

It says the balance will be allocated for other investment and future growth.

“Qube is pleased to have achieved a further important milestone,” managing director Maurice James said in a statement yesterday.

The development would bring the group “a step closer to realising the substantial benefits that the Moorebank project will deliver for customers, suppliers, and the entire east coast freight and logistics chain”, Mr James said.

Qube began work this month on the logistics park, which will be linked by rail to Port Botany and boast 850,000 square metres of warehouse space when completed.