The Retail Outlook & Crystal Ball Gazing
Each month sees roughly $27 billion flow through retail sales. A fair proportion of this slides through the fingers of two of Australia’s biggest banks; the NAB and the CBA. Understandably, then, retailers and economic forecasters often turn to these two (amongst others) for an indication of what the future holds.
To do so this month though would see you confused and disappointed. The CBA forecast an optimistic 0.9% growth in retail, while the NAB a far more miserly 0.3%.
The discrepancy, it seems, comes from vastly contrasting methods of measuring and estimating spend. NAB views data flow from its own cashless transactions, whilst the CBA utilises surveys and Google Trends, showing these as evidence that the floodgates of consumer spend might be about to open – after having been held so resolutely closed back in July, when retail contracted 0.1%.
The crux of the disagreement perhaps arises from differing beliefs in how consumers might spend their tax rebate. Not to mention, the majority of the population doesn’t receive its rebate until at least midway through the September quarter, meaning it may start to trickle through soon. Even so, this is expected by the NAB to be effectively neutered by stagnant wage growth.
For anyone looking to understand the future of retail, it would seem the big banks are not the best predictors we could hope for.
By James Kolacz
Related Tag: Retail Property Agent