Buying into anxiety
Shoppers are back but still lacking confidence
SHOPPERS are spending again but they are not feeling happy about it as they fret about the possibility of a downturn in the housing market, a report from Deloitte Access Economics shows.
Retail sales grew 3.6 per cent for the year to June and are expected to remain at this level throughout the 2018 financial year, the report to be released today says.
Sales growth in the 2017 financial year rose from the 3.5 per cent it averaged in 2016 but remains below its fiveyear average of 4 per cent.
Spending has, however, recovered strongly from a Christmas-New Year slump with sales growth hitting its highest level in four years during the three months to June, the report says.
Deloitte Access Economics partner David Rumbens said better full-time job numbers had seen retail spending recover from a particularly poor start to the year.
“This could well be the start of a retail recovery after three months of negative turnover growth in the last year,” Mr Rumbens said.
Despite signs the dark clouds over much of the retail landscape are parting, Mr Rumbens said people were “shopping through gritted teeth” as stagnant wage growth and worries about the health of the housing market clouded their outlook.
“Strengthening employment outcomes are providing the basis for spending to lift, including a rebound in fulltime jobs growth,” he said.
“But consumers aren’t happy. Despite improvements in unemployment expectations and an increase in business confidence, consumer sentiment is at a low point with concerns over financial risks.”
Mr Rumbens said retailers were unlikely to be feeling much better as they confronted aggressive discounting in many sectors, surging electricity bills and the impact of new competitors such as US online giant Amazon.