Australia’s sluggish retail sales are about to get help from international tourism led by China, according to analysis by Deloitte Access Economics.
Shopping by tourists is a bright spot in an otherwise bleak landscape of record low wage growth, high levels of household debt, and uncertainty over interest rates and house prices.
The latest official numbers show annual retail sales growth at 3.3%. And inflation-adjusted retail sales growth was just 2% for the year to December.
However, the latest quarterly Deloitte Access Economics retail report forecasts retail sales to grow by an inflation-adjusted 2.4% for the year to December and then by 2.7% over 2018.
“International tourist visitation in Australia is at record highs, and spending by tourists is exploding as well,” says David Rumbens, a partner at Deloitte Access Economics.
“The strong growth in tourism over recent years is expected to continue during 2017, adding a key supplementary market for Australian retailers.”
Tourist shopping spending from China alone is already about $1.4 billion a year, and is forecast to almost quadruple over the next decade.
Last financial year, spending by both domestic and international tourists was $130 billion.
Retail spending accounted for around 39.7% of this, including $36.1 billion on food and $15.6 billion (12.0%) on non-food retailing.
And as more tourists arrive in Australia, more international retailers want to come along for the ride.
“International tourism is luring international brands into the Australian retail market,” says Deloitte Access Economics.
At the start of this year, 39 of the top 250 retailers globally operated in Australia.
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