Thursday, July 14, 2011

The retail picture

Yesterday, my second favourite blog examined trends in retail spending following David Jones' 'shock' profit warning.  A long discussion about how best to represent the current retail climate ensued.

So to follow up, I have produced a graph of real pre capita trends in retail spending on a log scale to give, what I believe, is the best picture of retail spending patterns over time.  The per capita element is not necessary from an industry perspective, as total turnover drives the health of the industry no matter who spends it. But from a household spending perspective it is revealing.

The peak of this real per capita index is Dec 2007 (dotted line), and is down about 0.35% since that peak.  You could say that each persons retail spending has been flat for three and a half years after more than two decades of consistent growth.  In the decade prior to this peak per capita real growth in retail was 3.5%pa.

From an industry perspective, real turnover has grown at 1.7%pa since that peak, whereas in the decade prior, real total turnover grew at 4.9%pa.  This is clearly quite a shock to the sector, and I hope it stimulates some overdue competition and innovation in retailing in this country (as I have previously discussed).


  1. I dunno ... may do. I think the biggest hurdle retail has here is the mall model and the rates of rent charged, the homogeniety of mall (read Westfield) inclusions (who they take on) are big factors. People however have been weaned on the teat of this so I guess that they don't really know how a market place works. Korea has some good examples, but there too the mall is killing it all...

    just my 2c

  2. Great chart Cam - I'll ask Dave to put it up on MB.

    So whose your favourite blog then? :D