SYDNEY, Australia (FNS) -- Supermarket sales in Australia will increase 3.7% in 2000, with a 3% annual growth forecast for the following years, according to Deloitte Touche Tohmatsu's annual Global Power of Retailing survey.
Australia has enjoyed a boom in retail sales for the last two years, the survey noted.
"Total retail sales grew by 3% in the 12 months to May. Supermarket and grocery store sales in 1998-99 increased by 3.3 percent, with increasing sales for the larger operators being obtained at the expense of the smaller independent stores," the survey said.
The survey said globalization and the Internet will increasingly affect Australia as time goes on. "In particular, B2B e-commerce is expected to have a profound change on international trade, and there are continuing rumors of mega-retailers [such as WalMart and Aldi] becoming more interested in the local market," it said.
"Locally, there is a clear consolidation trend with the larger chains seeking to increase market share by taking over smaller chains, refurbishing existing stores or selling unprofitable chains and stores. Operators, especially in the food sector, have undertaken considerable investment in new technology, such as scanning, to improve their customer service. This is placing pressure on small and independent retailers, leading to calls for legislative remedies to be imposed by government," the survey found.
It noted that there have been no "mega" retail mergers or acquisitions in the market over the past six months, partly due to the "oligopolistic nature" of the market, with a small number of major chains such as Woolworths, Coles, Franklins and David Jones, each having a significant degree of influence in their market segment.
Although e-commerce is expected to modify the mix in sales formats over the next few years, Deloitte does not think Internet sales will be significant for at least two or three years.
"With the retail industry moving into a new phase of maturity over the next five years, operator numbers will decline, generating profits will become increasingly difficult and competition for share will become tighter," the survey said.
"The rate of growth in the Australian economy has been slowing slightly, but nobody really knows how much this has been affected by the changing consumption patterns due to the introduction of the GST [goods and services tax]. In addition, interest rates have been rising and the Australian dollar has collapsed over the past nine months, making imports from the developed world, which are already expensive due to tariffs, even more so," it said.
