For retail, the lousy figures compared to pre-COVID are interest rates, inflation, unemployment, wage growth and the Australian Dollar. The good news is that people have plenty in the bank saved, and the economy is moving forward. Still, Australians will have less money in the short term unless they dip into their savings, but only some think they will do this. So people will be cutting back on non-essential spending in the short term.
Retail must take a more strategic approach to navigate this current economic situation.
Australians are expected to alter their spending patterns in response to these pressures. People will spend less on things that aren't necessary. I suggest in the near future look at these products. One item I do not know is why more of my clients do not move more into toiletry. Nice soaps, towels, hand sanitisers, etc. These items do move and have good margins.
Also, fewer big purchases to drive customers to the major centres will make local traffic more critical. So you are going to have to connect with your local customers more.
If you are considering some major expansion now in business, you need to consider that getting the money to make any significant investment now will be expensive. Interest rates are not expected to go down for a year.
It is hard to say what will happen in the medium and long term; the government's fixation now is to get inflation down, even if it means driving us into a recession.
