Article writtten by Danielle Ecuyer

Where we are in the cycle

The pandemic impacts have stretched across all aspects of our lives and most notably it altered our spending patterns and the business paradigm for retailers. Retailers can be broadly divided into two sectors: consumer discretionary (all those goods you want but do not necessarily need) versus consumer staples (essential living items).

Both sectors have broadened their customer offering from in-store to online and most have an omnichannel presence.

The omnichannel evolution

Higher interest rates and the inflationary impacts on the cost of living have steadily been eroding built-up savings and available funds for consumption. In a post-pandemic world, the consumer has swapped the ‘shop-to-you-drop online’ for experiential services like eating out and you-only-live-once travel.

The current positioning and outlook for the retail sector

On balance, the August reporting season delivered a mixed bag of results across retailers in Australia. However, most analysts were pleasantly upbeat on a number of the results as they came in ‘better-than-feared.’ A recent survey by UBS found the consumer is bifurcated between income levels and across discretionary and non-discretionary items. Those with income greater than $100,000 are in a better position than the lower-income groups.