Following the tumultuous year of 2020, Australia’s retail sector has bounced back at a remarkable pace, well beyond any forecasts. Colliers latest Retail Research and Forecast report has found that as economic recovery continues to gather pace and normalised spending patterns have emerged, it is anticipated that we will see a stablisation of service-based consumption and a shift towards goods-based consumption moving forwards.
The report found that preliminary trade data for April this year shows a 1.1% growth compared to March 2021 and a 25.1% growth year on year.
Many retailers are reporting significant improvements in sales and online penetration has settled at a much higher level than prior to the pandemic.
“Over the last year, the Australian retail sector has been buoyed by the effective management of the pandemic and a beneficiary of the largest stimulus package in Australian history”, said Michael Bate, Head of Retail at Colliers. “Households are spending their savings accumulated during the COVID-19 period and retail trade is increasing.”
“Furthermore, overseas travel is unlikely to resume until 2022, meaning that a potential $60 billion which is normally spent by Australians on overseas travel every year is likely to be spent domestically.”
Colliers report states that shopping centre landlords are rising to the challenge of increasing consumer foot traffic and interaction across Australia, delivering a diverse range of amenities and building their own catchments of which they can leverage off an established consumer base.
Adrianna Kazzi, Senior Analyst, Research at Colliers said, “With tenant diversification and a commitment to be sustainably and socially responsible, landlords will be able to differentiate and make their centres more attractive by becoming more than just a place to shop.”
“Offering consumers leisure and entertainment within the complex, is a defensive measure against the growth of e-commerce, creating a place where people want to spend their down time.”
“Centres that offer a mix of retailers, services, and experiences will continue to entice consumers and subsequently boost the willingness of retailers and leisure operators to trade and renew their leases.”
“By increasing their offering and adding additional services to shopping centres, retail turnover is likely to increase.”