Tourism sustains Australian retail

BRISBANE: A jump in overseas tourists, particularly Chinese holidaymakers, is propping up an Australian retail sector weakened by dwindling local spending.

Australians are spending less because of record low wage growth, high levels of household debt and uncertainty about interest rates, according to the latest retail forecast report from Deloitte Access Economics.

Weak domestic demand is weighing on overall retail sales growth, which was just 2% in the year to December.

But retailers can look forward to an improvement in sales — 2.4% growth in 2017 and 2.7% in 2018 — thanks to an ongoing boom in tourists from overseas.

‘‘International tourist visitation in Australia is at record highs, and spending by tourists is exploding as well,’’ Deloitte Access Economics partner David Rumbens said.

‘‘The strong growth in tourism over recent years is expected to continue during 2017, adding a key supplementary market for Australian retailers.’’

Chinese tourists spend about $A1.4 billion ($NZ1.52 billion) a year in Australia, and that was set to almost quadruple over the next decade, Mr Rumbens said. Strong growth in numbers of Indian and the Middle Eastern tourists was also expected to deliver a boost.

In the 201516 financial year, domestic and international tourist expenditure totalled about $A130 billion and retail spending accounted for almost 40% of the pie.

Just under a third was spent on eating out, and 12% on nonfood retailing, the report said.

The boom in international tourism was also luring international brands to Australia and 39 of the top 250 global retailers now operate there.

This increased competition, mixed with slow spending growth, was hurting retailers’ profits, Deloitte Access Economics said.

Australian apparel retailers which have recently collapsed into voluntary administration include Marcs and David Lawrence, Herringbone, Rhodes and Beckett, Pumpkin Patch and Payless Shoes. — AAP