Retail real estate receiving mixed holiday messages
Commercial property owners are getting mixed messages about the prospects of retail this holiday ...
Commercial property owners are getting mixed messages about the prospects of retail this holiday season, with experts unable to agree on where the market is heading.
On one hand, upmarket stockist David Jones has released figures that indicate a 12 per cent drop in sales in the first financial quarter - showing that consumers are unwilling to open their wallets before the silly season has even begun.
To back this up, the Australian Retail Association has indicated that its members are only expecting a 2 per cent increase in discretionary spending over last year.
However Woolworths chief executive Grant O'Brien has asserted that - while certain market conditions were unfavourable - he was still hopeful that the festive season would prove to be a profitable one.
Speaking to Business Day on the factors affecting consumer spending, O'Brien said that the Reserve Bank might be able to make a difference to the struggling sector.
He said: "The interest rate reduction was certainly a step in the right direction for consumers' confidence, but there's nothing by way of a strong trend at this particular point in time that would point to that being the single answer to customer confidence."
While retail businesses are still working hard to deliver a profit over the festive season, a change on commercial property location could help to either reduce costs or improve exposure in the new year.