A year of false starts
If 2010 was the worst year in a decade, it seems May has confirmed 2011 is certainly
not going to be much brighter as we come close to the end of what has been a volatile
financial year
In the first half, February and April hinted at a recovery towards sustainable growth
with 3.6% and 3.3% YOY respectively, but after a little investigation, these figures
revealed themselves as little more than false starts, attributed to replacement
purchases after the floods and Easter falling later in the year, throwing off annual
comparisons
So, May seems to be the validation of what we have all been suspecting, it’s a bleak
time to be in retail in Australia…consumer confidence has reached recessionary levels
(92.8) in July, saving is on the rise, interest rates continue to be on hold and
last week David Jones announced a dampening of their profit, based on forecasts
of the last quarter to dive approx. 11%
Specifically, food continues to be the bellwether with supermarkets and grocery
up (2.84% YOY) for May, specialty foods performing slightly better (3.8% YOY) and
the food and liquor category averaging at 3.23% YOY
Health and beauty, is benefiting from the winter months (7.19% YOY) with spend the
highest it has been in a year. DIY categories are doing surprisingly well (9.22%
YOY) for furniture, floor coverings, housewares and textiles, with hardware, building
and garden (3.12%), but electrical, still suffering the effect of more conscientious
consumer, brings down the average growth to 0.82%
Clothing, accessories and department stores reflect David Jones’ decision to reduce
profit forecasts, while newspaper and book retailing has flattened as we have seen
major players exit the market
Other recreational is dismal (-8.22% YOY) and café and dinning has flat lined (3.76%),
while takeaways negative for the second month running after growth of over 10% this
time last year, bringing dinning out down to 1.84%
So although overall performance is a disappointment, it does confirm 2 things: 1)
The way to survive is to embrace the experiential categories that capture customer
engagement and 2) If you have not already, it’s time to look past traditional channels
and embrace the digital revolution which continues to change the retail landscape!
If you would like to understand your category in more detail, your relative performance,
or how to better engage your consumer, RetailOasis has extensive retail experience
and can assist you with future business development based on rigorous quantitative
analysis and insights. Contact Steve Kulmar or Nerida Jenkins at RetailOasis on
+612 9976 6222 or follow the link below to order a report
Click here
to view detailed report.
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