It was great to get out of the office for the afternoon, catch up with lots of familiar faces and meet new and interesting people at the Large Format Retail Association (LFRA) forum last Thursday.
My two main highlights were:
- the discussion with Mirja Viinanen, CEO and Chief Sustainability Officer from IKEA about the different sales formats Ikea has been investing in as well as its market leading sustainability initiatives; and
- Craig Woolford's retail market presentation where he conveyed that:
💡 Retail Spending Trends: From 2019 to 2024, retail spending saw above-trend growth, with a significant recalibration in FY24 due to higher interest rates and living costs. Despite a 4% decline in FY24, the average growth over five years was just over 5%.
💡 Consumer Behavior: Households are expected to have more disposable income in the next 12-24 months due to easing interest rates and upcoming tax cuts. However, consumers are maintaining a budget-conscious mindset, leading to careful spending.
💡 Retailer Performance: Profit margins for most retailers have improved since FY19, with some exceptions in discount department stores. Store growth is slowing, and retailers are focusing on optimizing existing floor space.
💡 Future Outlook: The retail sector is expected to see a soft recovery, with household goods likely to benefit the most. Retailers are adapting to changing consumer behaviors and economic conditions to maintain profitability.
💡 Retail Floorspace Supply: Retail floorspace supply growth will be slow for the next five years, pushing up rents. Major incumbent retailers stand to benefit with better like-for-like sales growth.
Whilst the delivery of housing is on everyone's minds at the moment, there are still opportunities for retailers and retail asset landowners to re-evaluate and optimize their existing floorspace and sites. Please get in touch if you'd like to discuss how I can help you with your land use and development strategy.
And that is a wrap! A big thank you to all of the LFRA members who joined us today at Crown Sydney for our third LFRA Forum of 2024.
After an impressive member exhibition and full agenda featuring an array of speakers on a range of discussions, we hope all attendees had a great day of networking, learning and collaboration.
#LFRA #LargeFormatRetail #SydneyForum #networking #event
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