AMP forecasts online shopping to reach 25% by 2030
2021 is set to be the ‘year of consumer’ as pent-up savings from the lockdown are put to use, particularly in the online space.
In a webcast, AMP head of research, real estate, Luke Dixon, said savings rates were at record highs and there had been an increase in consumer confidence which both bode well for retail spending.
“Lower taxes payable, government support payments, mortgage and rent relief and early access to super have all boosted households’ income. Consumer confidence is at the highest level for 10 years while a high household savings ratios means consumers have spending power in reserve,” he said.
A change going forward would be that retailers would have to decide how much bricks and mortar square metres they would need versus online as this had been an area of growth during the pandemic.
Dixon said: “Online shopping could be as high as 25% by 2030 and we have updated our forecasts on the back of strong retail sales last year. If we see this same level of online sales for the next five years then we could break through the 15%-20% barrier which is more akin to the online presence in the UK and the US.
“The challenge is geography which makes it harder for logistics firms to get value for money from online so there will be a slower growth rate here than in the Europe and the US.”
Meanwhile offices had surprised on the downside as work from home restrictions continued for longer than had been anticipated, particularly in Melbourne. Future demand, he said, would depend on how many people returned to offices as many people who worked flexibly or were at risk were unlikely to return full-time.
“The long-term effect of COVID has reduced supply and rental growth is not present, the demand side is soft. But international investors are still very keen on Sydney and Melbourne offices.”
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Laura Dew
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