Specialist food and fashion retail winners, online fashion spending matures

We’re well into 2019 now, but it’s always good to look back on  the year that was. Retail as defined by ABS, which excludes most pure play and international online retailers, reported calendar year total growth of 3%, this is a slippage from the 5 year CAGR of 3.4%

Low wage growth, high personal debt levels and a weakening housing market – particularly in Sydney and Melbourne – have definitely had their impact on consumer spending

In fact, with annual CPI of 1.8% and population growth of 1.3%, real retail growth was a nominal 0.2%

But amongst this flat market, there were a few key winners. Leading the pack was other (where the ABS puts the purely retailers it tracks), which grew at 6% . But in the heritage ABS categories specialist food grew at 5%, and clothing grew at 4.3%

Our sense of wealth might be declining, but it hasn’t stopped us treating ourselves on premium food and fashion

Comparing ABS to Total Online

An important overlay to this flat retail trade growth is analysis of the total online retail market. The NAB online Index reported 9% YOY growth in December

Comparing major categories between ABS and NAB, there are three important learnings:

1. Future growth in department stores will just about all come from online, which experienced 35% YOY growth

2. Food delivery services like UberEats and Deliveroo, with 11% growth, are holding up the takeaway category

3.Online spending on fashion has now matured and is growing at the same rate as the ABS fashion market (3.5%)

Key Learnings for 2019

Continue to invest in premium food and fashion experiences – it’s how we treat ourselves when we’re a  bit down

If you’re running a department store invest all your energies in frictionless retail

Home categories will be clearly holding out for a rebound in the housing market. We will have to wait to see if the banks dare to relax their lending conditions enough for this tot happen