In the ever-evolving landscape of Australian retail, recent figures released by the Australian Bureau of Statistics (ABS) reveal a steady upward trajectory in retail turnover despite rising cost of living pressures.
March 2023 saw a modest 0.4 per cent increase, building upon the 0.2 per cent rise witnessed in February.
Amidst rising household costs and an uncertain macroeconomic climate, industry leaders such as Vicinity Centres, GPT and Scentre Group commend the resilience of the retail sector, with growth and positive developments in customer visitations and sales.
Peter Huddle, the CEO and Managing Director of Vicinity Centres, lauded the Australian retail sector for showcasing its resilience amidst mounting household expenses and escalating near-term macroeconomic ambiguity.
“Our premium centres delivered 20.3 per cent growth and our core centres remained resilient, with 8.4 per cent growth, indicating the continued strength of both discretionary and non-discretionary demand.
“It was particularly encouraging to see the positive momentum in CBD visitations during the quarter, which underpinned a 37.2 per cent uplift in CBD sales and in fact, our CBD portfolio was a key contributor to our overall portfolio sales performance.”
Acknowledging the burgeoning burden of living expenses and the possibility of diminished consumer spending, Mr Huddle expressed a cautious outlook for Vicinity Centres.
Meanwhile, Scentre Group’s Chief Executive Officer, Elliott Rusanow, highlighted the success of their strategic approach to drawing larger crowds to their centers, which has translated into robust operating performances for the group.
“We welcomed 163 million customer visits in the first 17 weeks of the year, an increase of 20 million or 13.7 per cent compared to the corresponding period in 2022. On a rolling 12-month basis customer visitations were 499 million, up 22.6 per cent on the previous corresponding period.
“Our focus is providing people with more reasons to visit our destinations and so far this year, we have activated more than 3,300 events.
“Our business partners achieved $6.4 billion of sales in the quarter, up 14.4 per cent compared to the corresponding quarter in 2022. On a rolling 12-month basis to 31 March 2023, our business partners achieved record sales of $27.5 billion.”
The overall visitation to Vicinity’s portfolio also demonstrated a notable upswing, with an increase of nearly 16 million visits in the third quarter of fiscal year 2023 compared to the same period in the pandemic-affected third quarter of fiscal year 2022, which was marked by the Omicron outbreak.
These visits accounted for approximately 88 per cent of the visitation levels recorded in 2019. Excluding CBDs, visitation during the quarter reached 93 per cent of the levels observed in 2019.
Meanwhile, GPT observed a rise in sales across its group. Total centre sales experienced a substantial increase of 16.5 per cent, while total specialty sales surged by 15.4 per cent compared to the same period in 2022.
GPT’s Chief Executive Officer Bob Johnston said the group continues to see good momentum across its retail portfolio, with high occupancy and sales productivity driving performance.
“While elevated interest rates and inflationary pressures are expected to moderate retail sales growth over the course of 2023, GPT’s portfolio is well placed given positive leasing demand and structured rental increases,” he said.
ABS Head of Retail statistics Ben Dorber said while retail sales recorded a third straight rise in March, a pull-back in spending on discretionary goods has seen monthly turnover remain at a similar level to six months ago.
“Spending on non-food retailing has slowed in response to interest rate rises and increased cost of living pressures,” he said.
“This follows increased spending during and immediately following much of the COVID-19 pandemic period.”