Retail Sector Braces for Tough Holiday Season

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
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

Austal Expands Patrol Boat Fleet with New Contract for Australian Border Force

11 May 2026: Paige Estritori

Austal Limited has been awarded a contract extension valued at approximately A$150.3 million to construct two additional Evolved Cape-class Patrol Boats (ECCPBs) for the Australian Border Force (ABF). This brings the total number of ECCPBs contracted for delivery to the ABF to six, underscoring the ongoing commitment to bolstering Australia's maritime security capabilities. - read more

Incat's Hull 096 Embarks on Sea Trials: A Milestone in Electric Ferry Innovation

11 May 2026: Paige Estritori

Incat's Hull 096, the world's largest battery-electric ferry, has commenced sea trials on the River Derwent in Hobart. This 130-metre vessel, capable of carrying 2,100 passengers and 225 vehicles, represents a significant advancement in sustainable marine transportation. - read more

The Boat Works Breaks Ground on Pier 25, Welcomes Marine Solutions Australia

11 May 2026: Paige Estritori

Construction has commenced on Pier 25 at The Boat Works on the Gold Coast, marking a significant expansion of one of Australia's largest marine maintenance and refit facilities. This architect-designed, multi-storey development will house marine showrooms, office suites, and crew accommodation upon its completion in late 2026. - read more

d'Albora Marinas Enhances Sustainable Boating with GoBoat Acquisition

03 May 2026: Paige Estritori

d'Albora Marinas, Australia's largest marina and hospitality network, has recently acquired GoBoat Australia, a company renowned for its sustainable, self-drive electric picnic boats. This strategic move aims to accelerate GoBoat's expansion and strengthen d'Albora's national presence in the marine industry. - read more

Vision Marine Technologies Secures Full Commitment for 2026 Electric Boat Production

03 May 2026: Paige Estritori

Vision Marine Technologies Inc. has announced that its 2026 electric boat production is substantially committed, reflecting a surge in commercial and retail agreements. This milestone underscores the growing demand for sustainable marine solutions and positions Vision Marine as a leader in the electric boating industry. - read more

Marinas26 Conference to Highlight AI's Impact on Marina Operations

25 Apr 2026: Paige Estritori

The Marina Industries Association (MIA) has unveiled the comprehensive program for Marinas26, its biennial conference and trade exhibition, scheduled for 24-27 May 2026 at the RACV Royal Pines Resort on Queensland’s Gold Coast. Embracing the 'Future Smart' theme, the event aims to delve into emerging trends and technologies poised to reshape the marina and boatyard sector across the Asia-Pacific region. - read more

Click for more Finance News