Retail spending for most retailers is forecast to grow by 3% next year, according to an article in todays SMH, while spending in department stores is forecast to fall 4%, in what was described as a two tier market in retail, as shoppers move away from high end expensive products, into the low and mid range markets.
But that’s not the whole story. Consumers are becoming more aware of price comparisons and department stores are finding it harder to sustain higher margins, having to reduce product prices to stay competitive.
While retailers are quick to blame online sales from overseas web sites for their woes, this is only a marginal factor according to Clime Investment Management, who point out that “the proportion of online sales is still weighted primarily toward domestic suppliers at 73 per cent as opposed to 27 per cent internationally”.
It has an impact on the value of shopping centres. Those centres having Myers and David Jones as anchors were always considered the best ones to own, but as they experience lower turnover, mid range centres, that are more likely to be anchored by Woolworths and Coles, K Mart, Big W and Target, are offering comparatively better turnover figures in general.