An increase in foot traffic has bricks-and-mortar retailers feeling optimistic, with confidence in the industry rebounding to new highs.
According to the latest CommBank Retail Insights Report, 41 per cent of retailers predict an improvement in business conditions in the year ahead—the highest proportion since the survey began in August 2015.
Retailers operating physical stores only reported the greatest increase in confidence, with 34 per cent adopting a positive outlook on the future. This is double the number with a positive outlook six months ago.
The research suggests this renewed optimism was buoyed by a spike in foot traffic, as almost half of bricks-and-mortar only retailers (47 per cent) reported more customers visiting their stores.
Online retailers were also positive, with 41 per cent of pure play e-commerce businesses flagging better conditions ahead (up from 32 per cent in July 2017) and 44 per cent of omnichannel retailers expecting the same (up from 38 per cent).
Commonwealth Bank national manager of retail, Jerry Macey, says it is encouraging to see retailers so optimistic about the future.
“This confidence appears to be underpinned by a healthy revenue outlook for most retail businesses and continued growth in online sales,” he says.
“We have seen bricks-and-mortar retailers emerge strongly from a period of subdued optimism as they report an upswing in customers coming through their doors in the year to date.”
While retailers across all categories experienced improved confidence, it was most pronounced for clothing and footwear retailers, with 40 per cent believing business conditions will improve in the year ahead, compared to 27 per cent in July 2017.
In the homewares and hardware category, 44 per cent of retailers reported feeling confident, up from 33 per cent in July.
West Australian retail businesses experienced the greatest surge in optimism to rank as the most confident state, with 56 per cent expecting conditions to improve over the next 12 months compared to just 33 per cent a year ago.
By Ruth Cooper
