Consumer sentiment to fall: IBISWorld

Retail is being hit hard by the financial crisis as consumer sentiment continues to fall, says IBISWorld report

Retail is the final sector identified in the IBISWorld report of the top-ten industry’s feeling the pinch of the financial crisis.

Due to the current economic climate, Australians are skimping on spending, preferring to hoard wages and government hand-outs.

According to IBISWorld, consumer sentiment will continue to fall, as job security becomes the number one concern for most Australians.

Online shopping was once a distant option for many retailers, yet the current market is encouraging operators to provide web services, IBISWorld says.

IBISWorld also predicts that as retail sales slump and household wealth declines, budget-conscious buyers will look online and overseas for alternative products.

However, retailers can cut costs by trading online, cutting out the ‘middle-man’, dealing directly with the manufacturer, or bulk buying through a cooperative.

While discounting is an effective strategy to eliminate surplus inventory, IBISWorld warns that it can be hurtful to the brand.

Businesses should concentrate their efforts on improving sales, after-sales and customer support.

Finally, retailers who use the current situation to win market share in a mature and saturated market will enjoy long-term benefits when the economy
eventually recovers.

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