Bricks-and-mortar retailers have defied fears of online wipeout as confidence hits new high.
CommBank’s latest Retail Insights Report has revealed that confidence in the Australian retail industry has bounced back to fresh highs, driven by a sharp rise in optimism among bricks-and-mortar-only retailers.
According to the report, retailers have grown more optimistic over the past six months. Forty-one per cent of those surveyed predicted an improvement in business conditions in the year ahead – the highest proportion since the survey began in August 2015. More than three-quarters (76 per cent) are also forecasting stronger revenue over the next 12 months, with 43 per cent anticipating growth of at least six per cent.
The steady growth in online sales is also expected to continue – retailers predict an almost 20 per cent increase in the year ahead to about a third of all sales by volume (31 per cent).
Nevertheless, bricks-and-mortar-only stores have reported the greatest increase in confidence, with 34 per cent now adopting a positive outlook for the future – double the number with a positive outlook six months ago.
The research suggests that this renewed optimism is underpinned by a spike in foot traffic, with almost half of bricks-and-mortar-only retailers (47 per cent) reporting more customers visiting their stores, up from 36 per cent in July 2017.
Confidence has also moderately increased across all retail channels, with 41 per cent of online-only ‘pure play’ retailers predicting better times ahead (up from 32 per cent in July 2017) and 44 per cent of multichannel retailers expecting the same (up from 38 per cent).
National Manager of Retail at CommBank Jerry Macey said, “It’s encouraging to see retailers’ view on future conditions surpassing previous highs seen in our first analysis of the sector in 2015. This confidence appears to be underpinned by a healthy revenue outlook for most retail businesses and continued growth in online sales.
“We’ve seen bricks-and-mortar retailers emerge strongly from a period of subdued optimism as they report an upswing in customers coming through their doors in the year to date.”
Read CommBank’s full report here.
