Skip to main content

Deloitte Access Economics Retail Forecasts

A tale of two economies

6 March 2024: After four consecutive quarters of negative growth, Australia’s retail recession is finally over. Yet, despite the good news, that doesn’t mark the end of hard times for retailers. 

Releasing the latest edition of Deloitte Access Economics’ Retail Forecasts, Deloitte Access Economics partner and principal report author, David Rumbens, said: “Retailers have really struggled over the past year. 2023 was the worst year for retail sales growth in a generation, and retailers had to offer significant discounts to get customers in the door.

“The aggressive discounting in the December quarter drove sales, but heavily ate into margins. Data released this week by the ABS shows that profits in the retail sector are up by just 1.4% over the year – a fall in real terms – with profits particularly falling away at the end of the year, down 10.9% in the December quarter.

“This year, 2024, is expected to be a tale of two economies, with the first half seeing a continuation of 2023, where consumers remain cautious and spending subdued. The second half however may be more favourable.

“Households are still feeling the brunt of higher interest rates and elevated, albeit moderating, inflation. The January retail sales data released last week points to consumer caution. The sector only grew 1.1% in nominal terms over the year to January 2024. This really highlights the weakness of 2023, and the fact that the recovery has not really kicked into gear yet.

“We expect consumer caution to continue into the first half of this year, with retailers expected to continue discounting to entice shoppers into their stores.

“The second half of 2024, however, is expected to be a turning point for the Australian economy. Real wage growth and disinflation are expected to continue, the updated stage three tax cuts will loosen purse strings, and interest rate cuts are likely.”

According to the report, 2025, is expected to build on the strength of the second half of 2024. Real retail turnover is expected to increase by 0.9% and 2.2% in 2024 and 2025, respectively. 

National real retail turnover (year-to)

Source: ABS; Deloitte Access Economics

Retail Forecasts is produced quarterly and provides analysis of current retail spending and the economic drivers that influence this. It includes ten year forecasts of retail sales by major category and of key economic drivers.

Download the executive summary

Purchase the full Retail Forecasts report here

Further information (publications):
T: 1800 673 647