The report consolidated insights from the country’s leading retail experts on the performance and outlook of Australia’s retail industry and set the agenda for 2022 retail issues – from industry performance to sustainability and e-commerce to consumer trends.
“The ARA Retail Review 2022 creates the first unified view of the sector. This is a valuable resource for retail businesses and will better inform governments and other stakeholders on the challenges and opportunities that lie ahead for the industry,” ARA chief executive Paul Zahra said.
“We are on a treacherous path forecasting the next 12 months given the turbulence every retailer has experienced over the past two [years]. Even so, there are some very clear themes that will set the direction for the year ahead, even if precision is a challenge.”
The paper concluded that online sales may still grow in 2022, but it may be modest, while stores should see a recovery in sales. Online food retail finished 2021 accounting for 7 per cent of all sales and in non-food it was 24 per cent of sales. This compares with 3 per cent and 14 per cent for food and non-food respectively in 2019.
“There will still be strong growth in online sales over the next decade. Based on our research, online sales in food retail will still rise three-fold. For food sold online, solving the problem about the cost of delivery will determine how quickly this rise happens,” Craig Woolford, director of retail mosaic, said.
Mr Woodford said retail category performance could look quite different in 2022 compared with 2020 and 2021.
The research found that household goods sales have risen by 10 per cent per annum over two years, partly a function of the need to make our homes more functional given COVID-19, but also a desire to make our homes a nicer place to be.
“Given double-digit historical growth, then a year of decline of 1-2 per cent in household goods seems plausible. Fashion categories were more impacted by lockdowns over 2020 and 2021 and if the government’s promises are upheld, then a more normal operating environment will result in better sales for fashion retailers,” Mr Woodford said.
In food retailing, there will be a normalisation of dining out, which should result in stronger growth for café and restaurants, and some weakness in supermarkets. Albeit higher food inflation will help reported sales for supermarkets in 2022.
Household goods sales could decline, while fashion and dining out should see strong sales growth. The strength of each retail category will be influenced by the growth achieved in the recent past.
