Citi Australia survey finds retail spending in shopping centres continues to be resilient

Consumer spending at some of Australia’s most popular shopping centres is resilient despite cost-of-living pressures, new research has found.

Shopping centres are still the “go to” destination for millions of consumers despite cost-of-living pressures as population growth and high employment underpin the sector’s strong performance in the lead-up to Christmas, ­according to the results of a survey.

Citi Australia analysts visited a number of Australia’s popular shopping centres and found that a key takeaway from the research was the strength of the sector.

“Australian retail consumption in the shopping centres we visited appears to be resilient, as increased population growth, high employment and savings seem to be offsetting some of the impact of higher cost of living and interest rates,” it said.

Retailers enjoyed a September sales rise of 0.9 per cent, according to the Australian Bureau of Statistics. The rise comes after a 0.3 per cent increase in August and a 0.6 per cent lift in July.

Citi Australia visited three Vicinity centres, DFO Essendon and Chadstone in Melbourne and the Queen Victoria Building in Sydney, and two Scentre assets – Westfield Bondi in Sydney’s eastern suburbs and Westfield Sydney in the CBD.

Citi said they found limited inventory discounting. Demand for luxury retail remained strong despite a moderation in local Australian consumers who had been replaced by the return of offshore luxury fashion consumers. The survey found some weakness in specific brands for younger people.

National Retail Association deputy chief executive Lindsay Carroll.

Citi expects the current retail bricks and mortar supply-demand balance to remain intact due to limited additional development supply and there was continued strong demand for food and beverage offerings.

National Retail Association deputy chief executive Lindsay Carroll said the September sales boost was a welcome reprieve for retailers.

“As people anticipate a hotter-than-usual summer on the horizon they loosened up their purse strings in preparation,” Ms Carroll said.

“Department stores and household goods retailers experienced the highest sales boosts of 1.7 per cent and 1.5 per cent, respectively. Other retailers experienced a surprising increase of 1.3 per cent.”

Growing Australian sportswear brand LSKD recently opened its ninth store, at the Melbourne Central Shopping Centre. The business – which up until a few years ago was solely online, plans to continue its bricks and mortar retail rollout with outlets on the Gold Coast and Sunshine Coast.