An explosion of international tourism is set to give the retail sector a much-needed boost, helping to offset a harsh landscape for Australian consumers, a new report predicts.
Households face a combination of record low wage growth, high levels of debt and the uncertainty over both house prices and interest rates, Deloitte Access Economics says in its quarterly Retail Forecasts report.
But Deloitte's partner David Rumbens says strong growth in tourism over recent years is expected to continue during 2017, helping Australian retailers.
""International tourist visitation in Australia is at record highs, and spending by tourists is exploding as well," he says in the report released on Friday.
Tourist spending from China alone is already around $1.4 billion per year and is set to almost quadruple over the next decade.
Strong growth is also expected from India and the Middle East.
During the 2015/16 financial year, domestic and international tourist expenditure totalled around $130 billion.
Almost 40 per cent was spent at the shops, including $36 billion on food and $15.6 billion on non-food retailing.
However, Mr Rumbens says retail profits over the past six months are the lowest results in almost five years due to intense competition mixed with slow spending growth.
He expects a steady improvement in retail sales growth through 2017 of 2.4 per cent and 2.7 per cent next year after rising two per cent in 2016.
