Here's Why Australian Retailers Should Have A Strong Year

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New South Wales has climbed its way back to the top of the retail sales growth ladder, according to Deloitte Access Economics.

Retailers have gained a fair share of NSW household income, producing the strongest retail results for the state since 2009.

Retail sales volumes in New South Wales rose by a very strong 2.6% in the March quarter, following a strong rise of 1.8% in the December quarter.

Deloitte Access Economics forecasts national inflation-adjusted retail sales growth to grow by 3.2% in 2013-14, and then to move up to a peak of 3.6% in 2014-15 before easing to 2.4% sales growth in 2015-16.

After a torrid few years, retailers have enjoyed improved trading conditions spurred by low interest rates and a recovery in both house building and housing prices.

Sales over the year to March 2014 were up a very solid 3.2%, with turnover at cafes and restaurants and clothing retailers booming.

Retail inflation has also picked up in the stronger spending environment, with some price increases stemming from the earlier fall in the $A.

That sees nominal sales growth over the year to March 2014 at 5.6%, the strongest result since the post-GFC cash handouts.

Deloittee believes the federal budget, which caused a slump in consumer confidence, shouldn’t derail the consumer spending recovery.

It says:

“But consumer confidence can also be fickle and post-budget readings have slumped. How permanent that confidence slump is will be interesting to watch in the coming weeks.

“On the view that consumers will respond to actual influences on their ability to spend rather than perceived ones, the budget shouldn’t stop 2014-15 from being a strong year for retail.”

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