Spend Trend 2014

11 December 2014

2014 was a more positive year for Australia’s retail sector, with BDO’s annual Spend Trend report revealing the sector is recovering with sales revenue and profit margins moving upwards.

BDO’s report compared key 2013-14 financial ratios and indicators for 19 ASX-listed retailers and 13 international retailers from across the US and UK.

Steady sales and margins, plus strategic cost adjustments which result in stronger underlying profits are helping Australian retailers to hold their own against their international counterparts.

The 2014 global retail landscape has been characterised by hyper-integration, with more international retailers entering new markets such as Australia. As a result, retailers have had to respond to increasingly sophisticated customers by better integrating their brand sales experience across all touch points, from the computer to the change room, and the smartphone to the sales counter.

Key report findings include:

  • Australian retailers increased their gross profit margins by 2.2%, while those of the international retailers fell 2.8%
  • Local specialty retailers are better balancing their wages, rent and marketing costs with those expenses now representing 33% of sales, as opposed to 41% in 2013 and 42% in 2012
  • Australian specialty retailers increased their average net profit margins by 11%, whereas international retailers experienced a fall of 6%.

The Spend Trend 2014 report is now available to download and includes interviews with leading online fashion and footwear store The Iconic and retail technology and mobile engagement start-up Localz.