Retail Sector Braces for Tough Holiday Season

32

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Over the last year and a half, the Australian retail sector has been navigating what might be described as a recession, mostly indicated by declining trade figures. This downturn presents significant obstacles for retailers as they head towards one of the busiest times of the year.

In a sobering analysis by Deloitte Access Economics, partner Dave Rumbens highlights that retail spending has consistently declined over six of the previous seven quarters. This decrease is compounded by high living costs, rising interest rates, and stagnant wage growth, leading to an overall grim economic outlook.

“We’ve seen retailers struggle significantly," said Rumbens. "Real retail turnover has dropped for eight consecutive quarters, and consumer spending has barely budged at a 1.3% increase over the past 12 months.”

Data reveals that the national real GDP growth up to March was just 1.1%, the lowest rate outside pandemic years since the 90s. According to Rumbens, this is a clear signal that Australia’s retail industry has been in a persistent recession for 18 months.

Despite the bleak outlook, this contraction in the retail sector is not surprising, given the weakening job market and the rising number of business insolvencies. “On a per capita basis, the reality is even harsher with real per capita retail spending shrinking by 2.5% compared to last year and further declining by 6.3% since June 2022,” explained Rumbens.

The "economic horror show" does not solely impact retailers; it reflects a broader economic malaise. With real consumer spending on retail down by 0.6% over the year to June, Rumbens predicts a difficult period ahead, though he remains hopeful that future years might bring some relief.

The Deloitte report underscores that new financial relief measures, including energy bill subsidies and tax cuts, might help increase disposable income and improve retail turnover. “While retailers should brace for continued challenges through the holiday season, we anticipate some gradual recovery," said Rumbens. Predictive figures show real retail turnover growth potentially rising from 0.3% in 2024 to 1.5% in both 2025 and 2026.

The recent monthly Consumer Price Index report for July shows inflation easing down to 3.5%, and underlying inflation dipping to 3.8%. Such signs might be initial indicators of economic stabilization, offering a glimmer of hope for Australian retailers.

Amidst this “new normal” of cautious and value-focused consumer behavior, the path to recovery might be slow, but not unattainable. Retailers who can adapt to the evolving economic landscape will be better positioned to overcome the tumultuous times still expected before a more stable future in 2025-26.

Published:Sunday, 1st Sep 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Clear

Snowy River Caravans Tops Q3 2025 RV Market with Dual Category Leadership

17 Nov 2025: Paige Estritori

In a remarkable development for Australia's recreational vehicle (RV) industry, Snowy River Caravans has secured the top position in both the Imported and RVMAP categories for the third quarter of 2025. This achievement signifies a notable shift in consumer preferences and market dynamics within the sector. - read more

Jayco Continues to Lead Australia's RV Market in Q2 2025

17 Nov 2025: Paige Estritori

Jayco, a prominent name in Australia's recreational vehicle (RV) industry, has successfully maintained its leading position in the market during the second quarter of 2025. Despite experiencing a slight decline, the brand continues to hold a substantial share, reflecting its enduring appeal among Australian consumers. - read more

Rising Caravan Imports and Declining Local Production: Implications for Australia's RV Industry

17 Nov 2025: Paige Estritori

The Australian recreational vehicle (RV) industry is experiencing a significant shift, marked by an increase in caravan imports coupled with a decline in local production. This trend raises important considerations for domestic manufacturers and consumers alike. - read more

Crusader Caravans and BIG4 Holiday Parks Join Forces to Enhance Caravanning Adventures

09 Nov 2025: Paige Estritori

In an exciting development for Australian caravan enthusiasts, Crusader Caravans has announced a strategic partnership with BIG4 Holiday Parks. This collaboration aims to provide new caravan owners with exclusive benefits, enriching their travel experiences across the country. - read more

Australian Caravan Parks Experience Growth Amid Economic Uncertainty

09 Nov 2025: Paige Estritori

Recent data indicates a notable increase in occupancy rates across Australian caravan parks, showcasing the sector's resilience in the face of economic challenges. In October 2025, cabin occupancy nationwide rose to 69%, a four-point increase from the previous year. Powered sites saw a three-point rise to 52%, while unpowered sites reached 22% occupancy. - read more

Click for more Finance News