Retail spending on a go slow but will rise 2.2% in 2013
Deloitte Australia predict retail sales to grow 2.2% in 2012-13 and will soar further in years ahead, inflation-adjusted.
The retail forecast today also warned retailers to keep costs under control saying it is “imperative” given current tough trading conditions.
“While discounting can assist sales in the short term, it is often at the expense of profit margins. In order to keep prices low on a sustainable basis, and remain competitive in the market, cost control is the key,” Deloitte said in a statement.
While the start of 2013 may see soft demand, there are some positive signs on the economic horizon including low interest rates (although “have yet to fully work through”), rising consumer confidence, housing activity lifting and the household savings rate has finally levelled out.
Retail growth may lift marginally in 2013-14 (2.5%), before improving to 3.6% in 2014-15 as broader economic conditions and housing activity improve.
Future consumer spending growth should at least match income growth, Deloitte believes.