Online sales a concern for retailers

Australian retailers remain pessimistic in their expectations for the first quarter of 2012, fuelled by slowing demand concerns, a private survey shows.

The Dun & Bradstreet national business expectations survey, released on Tuesday, indicated sales and profit expectations were down year-on-year, despite the sector showing a strong performance in the September quarter.

Sales expectations fell 15 points from the same time last year, while profit expectations dropped 22 points for the same period.

However, there appeared to be some improvement from late last year, with sales expectations at their highest level in 12 months.

Retail sales increased to an index of 14 in the September quarter — up from -3 in the June quarter, while retail profits reported an index of two compared to -10 in the June quarter.

Dun & Bradstreet chief executive, Christine Christian, said competition from online sellers was an increasing concern for Australian retailers.

"High street retailers are facing increasing competition from online stores, compounded by the fact that they are dealing with overheads not applicable to e-commerce," she said.

"The situation is likely to deteriorate for those retailers unwilling or unable to adapt to changing consumer behaviour."

More than half (55 per cent) of retailers surveyed named slowing demand as their primary concern for the year ahead, with 56 per cent saying they expected online retail to impact mainstream retail businesses.

Christian said a general negative outlook for the global economy was also impacting on expectations.

"As the world contemplates a second recession, it is inevitable that local businesses will begin to question how this may affect their business in the coming year," she said.

"As insulated as we have been so far from the turmoil in overseas markets, a second global recession will undoubtedly have consequences for sectors of the economy."

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