Deloitte Access Economics has released its retail forecasts for 2025.
The report comes amid the slowest annual retail sales in more than 30 years outside of the pandemic, despite the strongest population growth rate in more than 70 years:
The forecasts also come in the wake of real retail spending contracting by 0.4% over the March quarter of 2024 and collapsing in per capita terms:
Deloitte warns that the planned halving of net overseas migration from current obscene levels “risks dampening the retail recovery”:
“Of concern for retailers may be the changes coming through a reduction in net overseas migration, largely as the post-COVID catch-up phase runs out, but accentuated by the Federal Government’s Migration Strategy”.
“The expectation is that net overseas migration will halve from 528,000 in 2022-23 to 260,000 in 2024-25 and 235,000 from 2025-26 onwards. This would bring us back to around the rate of net overseas migration seen pre-COVID”.
“As part of this, the Government has announced plans to implement a cap on international students, significantly increase student visa costs (more than double) and implement more rigorous English language tests for prospective student applicants”…
“A reduction in migration is likely to negatively impact retailers from a workforce perspective and result in a smaller pool of potential consumers”.
“All of this means that the retail recovery, pegged for the end of this year, may still come with challenges for retailers”.
Nevertheless, Deloitte says that “2025 is looking brighter”:
“Real turnover is expected to increase from 0.0% in 2024 to 2.3% in 2025”.
“Household goods turnover should pick up more with better economic conditions and with an uplift in national building activity, supported by the Government’s ambitious housing targets”.
“The additional dollars from tax cuts later this year may bump up spending at Cafes, restaurants and takeaway in the September and December quarters”.
