{"id":10408,"date":"2025-07-21T08:15:10","date_gmt":"2025-07-21T08:15:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/10408\/"},"modified":"2025-07-21T08:15:10","modified_gmt":"2025-07-21T08:15:10","slug":"recession-smashes-aussie-retailers-macrobusiness","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/10408\/","title":{"rendered":"Recession smashes Aussie retailers – MacroBusiness"},"content":{"rendered":"

South African fashion retailer The Foschini Group has 563 stores across Australia, and its brands include Tarocash, Connor, and Johnny Bigg.<\/p>\n

Foschini\u2019s financial accounts show<\/a> that its Australian sales fell by nearly 3% to $745 million in the year to 31 March 2025.<\/p>\n

The company told investors and analysts that its Australian division is being impacted by factors such as low consumer confidence, high rents and wages, and a competitive fashion and apparel market.<\/p>\n

\u201cConsumer confidence remains low amid cost-of-living pressures and relatively high interest rates\u201d, the company said in its presentation to South African investors and analysts.<\/p>\n

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\u201cCost of doing business pressures including award wage increases and rent\u201d.<\/p>\n

\u201cTFG Australia continued to face difficult trading conditions with consumers under sustained cost-of-living pressure\u201d, it said.<\/p>\n

Country Road\u2019s parent Woolworths Holdings recently expressed similar concerns, claiming<\/a> Australia had been in a \u201cretail recession\u201d for 18 months.<\/p>\n

The macroeconomic data tell the tale.<\/p>\n

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The Q1 2025 national accounts revealed that Australian real per capita home consumption had contracted for seven consecutive quarters on an annual basis, down 2.4% from its peak.<\/p>\n

\"Per<\/p>\n

As illustrated below by Alex Joiner from IFM Investors, nominal retail sales growth has slumped to just 1.8% on a 6-month annualised basis in May.<\/p>\n

\"Nominal<\/p>\n

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Meanwhile, the following chart from AMP Chief Economist Shane Oliver shows that while the annual growth in real inflation-adjusted retail sales and household spending picked up slightly in May, it remained at heavily depressed levels.<\/p>\n

\"Real<\/p>\n

Real retail spending per capita has also fallen heavily from its mid-2022 peak.<\/p>\n

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\"Retail<\/p>\n

To add isult to injury, discretionary \u2018brick-and-mortar\u2019 retailers, like the ones mentioned above, are losing market share to online behemoths like Amazon, Temu, and Shein.<\/p>\n

Amazon entered the Australian market in December 2017 and rapidly extended its footprint.<\/p>\n

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Amazon Prime provides competitive pricing and unparalleled convenience, with most items delivered free within 48 hours.<\/p>\n

\"Amazon<\/p>\n

Amazon has indicated that it intends to expand its operations and delivery network in Australia, boosting competition for existing merchants.<\/p>\n

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Chinese behemoths Temu and Shein have also rapidly extended their presence in Australia, focusing on the lower end of the retail market.<\/p>\n

According to Roy Morgan<\/a>, 5.8 million Australians aged 14 and above used either platform last year, with roughly 80% of them making repeat purchases.<\/p>\n

Meanwhile, filings lodged with the Australian Securities and Investments Commission (ASIC) revealed<\/a> that fast-fashion retailer Shein had $1.23 billion in local sales in 2024. This compares to $979 million in the previous calendar year.<\/p>\n

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Shein\u2019s Australian profits increased from $10.6 million to $15.2 million.<\/p>\n

\"Shein<\/p>\n

Ben Gilbert of Jarden Investment Bank warned that competition among retailers is intensifying as Shein and online rivals Amazon and Temu gain popularity.<\/p>\n

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Gilbert stated that buyers aged 18 to 34 shop online nearly twice as frequently as those older.<\/p>\n

Weak consumer conditions and rising competition from online retailers are hurting traditional brick-and-mortar stores.<\/p>\n","protected":false},"excerpt":{"rendered":"South African fashion retailer The Foschini Group has 563 stores across Australia, and its brands include Tarocash, Connor,…\n","protected":false},"author":2,"featured_media":10409,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-10408","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/10408","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=10408"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/10408\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/10409"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=10408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=10408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=10408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}