RESEARCH
This year has seen many economic records broken, with retail being one of the hardest hit sectors during the pandemic. With the focus now centred on recovery as Australian life begins to return to life pre-COVID, Colliers International looks at what trends have emerged from the retail sector as a result of the events of 2020.
Retail trends from 2020 Fashion retailers have fared well Colliers International’s most recent Retail Research and Forecast Report has found that, despite the initial disruptions to 2020, some retail categories have been profitable during the pandemic. The report found that even in challenging categories, such as fashion, retail was able to reach record profits as a result of the government assistance measures put in place. Online retailers such as Kogan saw sales up 110% on the prior year, and profits up 56%. Temple and Webster has seen sales up 74% and EBITA up 500%. Premier Investments, owner of Peter Alexander, Smiggle, Just Group, Dotti, Jay Jays, Just Jeans and Portmans, reported an increase in online sales (up to 18% of total sales) with a 29% increase in net profit, despite sales being down 4.3% for the financial year. Although many fashion retailers have seen significant falls in sales during the second quarter, many have pivoted to online retailing and have seen online penetration jump dramatically.
Total online market penetration has surged in the non-food categories, reaching more than 20% at the peak of the pandemic and 17.6% in August, according to the ABS online index recording. 12 SCN
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The COVID-19 crisis has required MICHAEL BATE KATE GRAY retailers to adapt rapidly to changing Director, Research consumer demands, with some having Head of Retail Colliers International to change business models overnight; Colliers International those retailers that are able to maintain domestic travel and is therefore likely a connection to their consumers and to be spent in other retail categories. create further loyalty through an engaged Categories such as cars, home and value-added experience, have renovations and large ticket purchases continued to thrive. are all expected to be beneficiaries of Shopper spending patterns this spend. As time goes on – and have changed restrictions ease further – increased spend on cafés, restaurants and The spending patterns of Australian entertainment is likely. shoppers have been highly disrupted throughout 2020, although some Consumer confidence returns normality is starting to return. Essential to pre-pandemic levels spending spiked at the beginning of the pandemic in March, as many stocked Australian consumer confidence took up on toilet paper, cleaning products a nosedive in April as the pandemic hit and pantry staples. Australian shores with the lowest level When JobKeeper and early of consumer confidence ever recorded superannuation withdrawals commenced, since the survey commenced in the discretionary spending took off. 1970s, according to Colliers’ Retail Throughout August and September, Research and Forecast report. spending started to show more normal Since then, consumer confidence patterns and spending is now slightly has recovered to sit above pre-pandemic below normal levels. levels. It is now in positive territory at There have been interesting dynamics 105.0 and there is much more positivity at play with consumers unable to spend surrounding consumers’ financial in certain categories; the most obvious positions in the coming 12 months, is overseas travel, which is off the cards which is 6.2% above levels as at this year and most likely will continue to October 2019. be for until at least mid-2021. Supporting consumers to feel Overseas travel accounted for confident and wanting to spend again $61 billion during 2019, which is almost is key to the economic recovery, with double the superannuation withdrawals about 60% of GDP derived from to date. Not all of the overseas travel household consumption. SCN spend is expected to be spent on COPYRIGHT©
2020 SHOPPING CENTRE NEWS – ALL RIGHTS RESERVED
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