Sydney Impact Report Retail 2017
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Sydney Impact Report Retail Market First Half 2017 INSIDE THIS ISSUE: HIGHLIGHTS Retail Statistics 2 In seasonally adjusted terms, New South Wales retail market performed the strongest over the Online Retail 2 month, with an increase of 1.3% in total turnover to $8,436 million. Snapshot into Sydney Food Services Sector 3 Online Retail Sales Index released by the National Bank of Australia indicates a strong performance in online sales over the month of May, with a seasonally adjusted month-on-month increase of 1.3%. Investment Activity 4 As of May 2017, New South Wales’ Café, restaurant and catering services turnover stands at a seasonally adjusted $713.3 million, signifying a growth of 5.19% when compared to twelve months Development Activity 7 prior. Economic Fundamentals 9 A significant amount of retail development is expected to be completed by 2017. This includes the extensions of Emerton Village Shopping Centre, Glenrose Shopping Centre, Narellan Town Centre About Preston Rowe Paterson 12 and Market Place Leichhardt. Construction of Ingleburn Village Shopping Centre is also expected to be completed by 2017. Contact Us 14 Phone: +61 2 9292 7400 1 Fax: +61 2 9292 7404 Address: Level 14, 347 Kent Street Sydney NSW 2000 Email: [email protected] Follow us: Visit www.prpsydney.com.au to follow us © Copyright Preston Rowe Paterson NSW Pty Limited 9,000 4.0 Source: ABS/Preston Rowe Paterson Research 3.5 3.0 Retail Statistics 8,500 2.5 2.0 1.5 8,000 1.0 Over the month to May 2017, retail turnover in Australia increased by a 0.5 0.0 7,500 seasonally adjusted 0.6%, following a rise of 1.0% over the month to April -0.5 Retail Turnover $ million Turnover Retail -1.0 7,000 -1.5 (%) Change PercentageMonthly 2017. Turnover in May stood at $26,083.6 million in current seasonally -2.0 -2.5 6,500 -3.0 Jul-16 Oct-16 Apr-17 Jun-16 Jan-17 Feb-17 Mar-17 Aug-16 Sep-16 Nov-16 Dec-16 May-17 adjusted prices, with increases stemming from Food retailing (+0.1%), May-16 New South Wales Total (Industry) Turnover % Monthly Change Chart 2—New South Wales Retail Turnover—Source—ABS Household goods retailing (+2.2%), Clothing, footwear and personal accessory retailing (+1.3%), Other retailing (+0.6%), Cafes, restaurants and Online Retail takeaway food services (+0.6%) and Other retailing (+0.6%). While sales in The Australian & New Zealand Standard Industrial Classification (ANZSIC) the aforementioned categories were stronger, Department stores continue defines ‘retail trade’ as “the purchase and on-selling, commission-based to struggle with turnover falling 0.7% over the month. buying, and commission-based selling of goods, without significant information, to the general public”. In seasonally adjusted terms, New South Wales performed the strongest over the month, with an increase of 1.3% in their total turnover to $8,436.6 Online Retail Sales Index released by the National Bank of Australia million. New South Wales experienced the same changes over the different indicates a strong performance in online sales over the month of May, with a industry sectors over the month when compared to the rest of the country, seasonally adjusted month-on-month increase of 1.3%. This increase with monthly increases recorded for Food retailing (0.4%), Household follows a weak performance in April, of which the index contracted by -0.7% goods (3.7%), Clothing and footwear (1.9%), Café, restaurants and over the month. Over the year to May, online retailing increased by 7.9%. takeaway food services (2.2%) and Other retailing (2.8%), whilst It’s estimated that Australian consumers have spent approximately $22.53 Department stores experienced a decline of 0.5% over the month. When we billion worth of online transactions over the twelve months to May 2017, look at year on year change, Café, restaurants and takeaway food services which the NAB have estimated to be equivalent to 7.4% of spending at experienced the largest annual increase of 6.5%, followed by Clothing and traditional in-store retailers. The largest spend share over the month footwear (+5.3%), Household goods retailing (4.6%), Food retailing (4.5%) stemmed from online purchases of Homeware and appliance (11.5%), and Other retailing (2.8%). Department stores experienced a decline of Department stores (6.8%), Grocery and liquor (6.6%) and Personal & 1.4% in their annual turnover. recreational goods (5.7%). 23 3.00% 7.00% Source: NAB/Preston Rowe Paterson Research 2.50% 6.00% 22 2.00% 5.00% 21 1.50% 4.00% 1.00% 20 3.00% 0.50% Year % Change Year - 19 on 0.00% - 2.00% ($Billions) Spend Online Year Month to month growth (%) growth to month Month 18 -0.50% 1.00% -1.00% 17 0.00% -1.50% -1.00% 16 -2.00% Food Retailing Household goods Clothing, footwear & Department Stores Other Retailing Café, restaurants & May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 personal accessory takeaway food Source: ABS/Preston Rowe Paterson Research services Retail Sectors Total sum of online sales 12 months to... Month to month growth Chart 1—Year on Year % change to May 20017 of retail subgroups—Source—ABS Chart 3—NAB Online Retail Sales Index—Source—NAB Phone: +61 2 9292 7400 Fax: +61 2 9292 7404 Address: Level 14, 347 Kent Street Sydney NSW 2000 2 Email: [email protected] Follow us: Visit www.prpsydney.com.au to follow us 2 © Copyright Preston Rowe Paterson NSW Pty Limited A Snapshot into Sydney’s Food Services Industry The main drivers of the café, restaurant and takeaway food services 0.65 Source: ABS/PRP Research industry include real household disposable income, convenience of service 0.6 and location, health, competition and food and pop cultures. When we look 0.55 at wage growth between 2004 and 2012, figures were around 4%, which 0.5 allowed consumers to spend more on discretionary expenditure such as 0.45 dining out. However, between 2012 and 2016, wage growth slowed to an 0.4 % of Total Food Services Total %of average of 2% per annum, which inevitable would have an effect on 0.35 consumers’ choice to do so. When we look at total turnover for café, restaurants and catering services in New South Wales, figures slumped Cafes, Restaurants & Catering Services as a % of Total Food services down to $630.2 million during October 2014 before increasing to a turnover Takeaway food services as a % of total Food Services of $641.0 million in December 2014, and then further dropping to $626.9 Chart 5— Food industry subgroups as a percentage of total food services—Source—ABS million in February 2015. It was during February 2015 that turnover had recorded an annual decline of -1.95. However, we note that the sub-industry Consumer taste is also changing, with a shift in demand towards healthier, recovered afterwards, with fluctuating albeit positive annual growths up until quality food and beverages. Restaurants have begun to focus on fresh, January 2016, during which annual change in turnover in NSW peaked at premium ingredients and increasing their menu range as this is expected to 11.4% with a seasonally adjusted turnover of close to $710 million. As of reap in the most customers as they search for better quality dining May 2017, New South Wale’s Café, restaurant and catering services experiences. When we look at price growth of restaurant meals in Sydney, turnover stands at a seasonally adjusted $713.3 million, signifying a growth figures indicate that prices have been on the upward trend since December of 5.19% when compared to twelve months prior. 2015 when it comes to restaurant meals, albeit it showing signs of strong price fluctuations prior. Similarly with price changes for Takeaway and fast 720.0 25.00% Source: ABS/PRP Research foods in Sydney, we can see clear price fluctuations, with percentage 20.00% 700.0 increases peaking in December 2015 at 1.4% over the quarter 15.00% 680.0 10.00% (corresponding to Restaurant meals’ quarterly price decline of -0.4%), 660.0 5.00% though figures indicate that price changes for takeaway & fast food appear 640.0 0.00% to be on the downward trend. This figure indicate that in Sydney, consumers 620.0 -5.00% Annual Change in Turnover (%)Turnover in Change Annual are becoming more inclined to spend more on quality produce which often Turnover ($ million, Seasonally Adjusted) Seasonally million, ($ Turnover 600.0 -10.00% comes with sit-in restaurants rather than takeaway and fast food chains. In saying this, competition within the restaurant and food services industry is Cafes, Restaurants & Catering Services Turnover (NSW) Annual % Change Chart 4—Monthly turnover for Cafes, restaurants & catering services in NSW & annual percentage change— strong, which will be the main factor in limiting price growth in the future. Source—ABS From Figure 3, we can see that price changes in restaurants meals as well During this modern era, Australians are living busier lives, which inevitably as takeaway food is gradually syncing with price changes in CPI, indicating would lead to an increased demand in fast and convenient food and that restaurants and takeaway food services will have less room to move beverages. According to the Australian Bureau of Statistics, takeaway food when it comes to adding a mark-up to inflation. As at June 2017, restaurant services have increasingly become a larger portion of total Food services meals in Sydney inflated by 1.0% when compared to the previous three turnover over the past three years.