By Claire Reilly
SYDNEY, NSW: Consumers are saving their pennies rather than hitting the shops, according to recent figures released by Deloitte financial analysts.
The Deloitte Access Economics’ Retail Forecasts for May 2011, released today, shows that in light of stagnant jobs growth, falling house prices and natural disasters both in Australia and overseas, consumers are becoming more mindful of their savings.
“The strength of Australia’s recovery from the GFC has provided Australians with the luxury of being able to save instead of spend, and many are taking advantage of that and trying to get on top of their finances,” according to the report.
Click here to sign up for our FREE daily newsletter
Deloitte analysts also noted that retailers had had a slow start to the year.
“In real (inflation adjusted) terms, retail sales remained static in the March quarter of 2011. Over the past year sales have grown by 0.8%, below Australia’s population growth rate at present. No surprise then that retailers are vocal about their present woes and some are failing in what is a difficult trading environment.”
Another aspect of the current economic climate that retailers are feeling is the strength of the Australian dollar. The move beyond parity with the US dollar has led many consumers to shop online, a move that has forced regular bricks-and-mortar retailers to sit up and take notice.
“Caught behind their overseas rivals, Australian retailers are now rapidly trying to sharpen their internet presence, in what is a rapidly moving environment. However, consumers are mixing up where they source information from and where they purchase from to a greater degree,” the report noted.
However it’s not all bad news.
While groups such as the Australian Retailers Association have argued that Australia’s two-speed economy is leaving retailers behind, the Deloitte Retail Forecasts reported that the mining boom would have positive flow-on effects.
“Australia is, after all, in the midst of an unprecedented resources boom and there will be a range of dividends from that – jobs, wage growth, profits and government revenues.
“If the household savings rate remains around its current levels, that would mean consumer spending growth was matching growth in disposable incomes – which would be a handy improvement on recent events.
“Job and real wage gains, along with a levelling out in the household savings rate, is expected to help real retail growth lift to 2.2% in 2011-12 and 3.3% growth in 2012-13”.