Industry Report: Retail Trade - Mar08.pdfinterest rate rises through 2007 and 2008, which are designed to cool demand and therefore ease some of the pressure on prices. Also, inflation

Authors:

Julie Toth Senior Economist, Industry +61 3 9273 6252 [email protected]

Wain Yuen Economist, Industry +61 3 9273 6295 [email protected]

20 March 2008

Industry Report: Retail Trade

Retail spending growth set to decelerate in 2008

Our Vision:

For Economics@ANZ to be the most respected, sought-after and commercially valued source of economics research and information on Australia, New Zealand, the Pacific and Asia.

Inside:

Outlook for retail spending........1

Outlook for retail sectors ..........4

Food retailing .....................6

Department stores..............7

Clothing & soft goods ..........8

Household good retailing .....8

Recreational good retailing...9

Hospitality and services.....10

Other retailing..................10

Appendix: nominal retail sales, States and Territories............. 12

Contacts...............................15

Key points • Retail spending boomed through 2006 and 2007 on the back of

strong growth in Australian employment and household incomes.

• Growth in retail spending is set to decelerate in 2008 and 2009, as policy makers engineer a slowdown in domestic demand.

Outlook for retail spending Australian retail spending has boomed in recent years, along with the rest of the domestic economy. Total nominal retail sales increased by 6% in 2006, with growth accelerating to 7.3% in 2007. Even taking Australia’s escalating inflation rate into account, real retail sales grew a very strong 4.8% in 2007. Much of 2007’s sales growth was in the latter half of the year, following income tax cuts in July and very solid growth in employment and household incomes. December quarter sales were particularly strong, with 5.7% real growth from a year earlier (8% in nominal terms), despite interest rate rises in August and November.

2008 began on a softer note, with monthly sales growth flat in January (0.04% in seasonally adjusted, nominal terms). Australian consumers are currently being pulled in two directions. On the one hand, continuing strong growth in employment, combined with solid growth in incomes, is keeping our wallets at a healthy size. On the other hand however, further interest rate rises in February and March and worsening global financial market turmoil are significantly denting consumer sentiment and spending intentions, such that our wallets will be opening less frequently. This is likely to mean that even another scheduled income tax cut in July will not be enough to keep retail growth rates at 2007’s heady levels. For 2008 as a whole, we expect nominal sales growth to decelerate to 5.0%, and real sales growth to 2.6%. This will be close to half of last year’s strong sales growth rate, but it is nevertheless a solid result considering the significant headwinds and uncertainties facing Australian consumers in 2008.

Total retail turnover — nominal level and growth rate

0

2

4

6

8

10

00 01 02 03 04 05 06 07 08 0930

35

40

45

50

55

60

65

70

Growth in retail spending (LHS)

Retail spending (RHS)

annual % change $mn per qtr,nominal

Forecast

Sources: ABS and Economics@ANZ

Industry Report: Retail Trade - 20 March 2008

Page 2

Key drivers — the labour market and household incomes The key determinant of retail spending is the financial health of Australia’s household sector, as indicated by employment, disposable incomes, wealth, savings rates and related factors. Public mood or ’sentiment’ also plays a role in people’s willingness to spend their income (and in what they buy) or to save it.

Australia’s labour market is currently extremely tight, with record high employment and participation, and historically low unemployment. Annual employment growth accelerated to 2.9% in February 2008, again confirming the very strong underlying demand for labour. Labour supply is running at the slightly lower rate of 2.2%, and has exceeded 2% growth rates since December 2006. The participation rate has been growing as a result and as of February, it remained near its historic peak, at 65.2%. Yet, clearly not even this rate of additional labour supply has been able to completely keep pace with demand. As a result, downward pressure on the unemployment rate has been consistent. For the nation’s retailers, all of this means more people in work and earning money to spend, although as employers, it also means retailers in some locations are now facing the same labour shortage issues as other industries.

The tightness of the market and the emerging shortages has meant that the growing number of Australian workers have also enjoyed growing wages. Average weekly ordinary time earnings (AWOTE) grew by 4.5% in 2007 and the wage price index (WPI) grew by 4.1% — nearly double the headline CPI rate of 2.3% for the year. As is always the case however, wage rises have not been felt equally across all industries and all locations, with the WPI increasing by 5.6% in the high-growth mining sector for example, but only growing by 3.2% for hospitality employees and 3.6% in each of retail and wholesale trade.

Employment and participation are strong, unemployment is at 30 year lows

Employment growth

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

01 02 03 04 05 06 07 08

Annual % change

Seasonallyadjusted

Trend

Unemployment rate and participation rate

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

01 02 03 04 05 06 07 0861

62

63

64

65

66% %

Unemployment rate (LHS)

Participationrate (RHS)


This strong employment and wages story has in turn enabled strong growth in real disposable income for the household sector. In 2007, nominal aggregate household disposable income grew a whopping 9.1%, or 6.4% in real terms. As is the case with employment and wages, this aggregate increase in income is not distributed evenly, with some locations and some types of households benefiting more than others. More of it has flowed, for example, to the high-growth mining boom regions of Western Australia and Queensland, and less has gone to the south eastern states’ drought-affected agricultural regions.

For those households that have benefited, higher incomes have enabled more spending with retailers and on other goods and services, but also more savings. No doubt encouraged by rising interest rates, Australia’s national household savings ratio finally lifted above zero in the June quarter of 2007, after a five year run of negative levels. Successive rate rises in late 2007 and early 2008 have lifted the savings ratio further into firmly positive territory, as households

More Australians are working …

…enabling higher real household incomes…

…and supporting consumer spending, even as the savings ratio improves.

… and being paid higher wage rates …


Page 3

devote more of their income to repaying mortgages and other debt liabilities and putting aside more money for a rainy day.

The obvious question going forward, is how long this dream run for Australian employment and aggregate incomes can last. We think the best is now past, with both the Federal Government and the RBA talking actively of the need to slow domestic demand, in order to coax inflation back below an acceptable level. The RBA has backed its rhetoric with action, raising interest rates four times — making a total of 100 bps — in the past eight months. As a result, the growth rate in domestic demand is set to more than halve by early 2009. This will inevitably lead to a cooling in employment growth, to around 2% p.a., with the unemployment rate rising to approach 4.5% again.

This slowing of the labour market will contribute to a deceleration in annual growth of real household disposable income from a recent peak of 6.4% in 2007 to 5% in 2008 and 3.5% in 2009. At the same time, the changes in interest rates and credit markets will encourage growth in savings, such that the savings ratio will rise from 1.8% of household disposable income in 2007 to 3.3% in 2008 and 4.4% in 2009. Consequently, growth in national private consumption — a major portion of which flows to retailers — will slow to 3.5% in 2008 and 2.3% in 2009, taking retail sales growth down a few notches with it. While growth in employment, incomes and consumption will slow, it will not stop completely.

Aggregate household income will keep growing, but more of it is being saved instead of spent

-3

-2

-1

0

1

2

3

4

5

6

7

8

02 03 04 05 06 07 08 09

real household disposable income

Annual % change

forecast

-6

-4

-2

0

2

4

6

8

10

90 93 96 99 02 05 08

Household savings ratio

% of disposable income

forecast


Key risks — inflation and the global financial crisis Employment and incomes are of course, not the whole story. On the other side of the ledger, we also need to examine what is happening to household costs. And on the debit side, there is currently plenty of action.

Inflation is the key to the change in direction currently underway in the Australian economy. It is the primary reason behind the RBA’s series of official interest rate rises through 2007 and 2008, which are designed to cool demand and therefore ease some of the pressure on prices. Also, inflation has a direct effect on households’ real spending power; higher prices for food, fuel, rent, transport, education, healthcare and other essentials all erode the dollars left for more discretionary spending on retail, holidays and entertainment. And when household budgets come under pressure, the discretionary elements are normally the first to be cut.

The big change in the economic environment since mid-2007 has been the global turmoil besetting financial markets. While the events in the US may seem distant to many Australian households, they are already disrupting local debt

… so domestic demand and employment growth will slow

Inflation is reducing consumer spending power

The RBA has rapidly tightened monetary policy…


Page 4

and equity markets, eroding the value of shareholdings and substantially increasing the cost of credit for households and businesses alike. This has occurred through two mechanisms. First, interest rates actually paid by borrowers have risen, over and above the RBA’s official cash rate rises. And second, debt securities markets have effectively closed down, obliging the corporate borrowers who previously utilised them to go back to the banks for funding and credit. Banks do not have unlimited funds available to lend out however, so ‘credit rationing’, at least for business borrowers, is fast becoming a reality.

Higher interest rates and financial market turmoil have led to a sharp decline in consumer confidence in recent months. While it is too early to see the effects of this in national retail sales data, anecdotal evidence indicates that the slower growth phase for retail spending has already begun.

Total retail sales, annual % change

Nominal Real

2004 7.1 6.7

2005 3.1 1.9

2006 6.0 3.6

2007 7.3 4.8

2008 (f) 5.0 2.6

2009 (f) 4.3 2.1

Source: Australian Bureau of Statistics, Economics@ANZ

Outlook for retail sectors

Australian retail trade is dominated by food retailing, which comprises 41% of total spending. The share of turnover going to food retailers (primarily supermarkets but also smaller specialist food shops and takeaway shops) has not changed in a decade. Other market shares have not been as stable — department stores and recreational goods retailers have lost market share over the past decade, while household goods retailers and hospitality and services have increased theirs.

Retail sectors’ share of total retail sales

Retail Sector Share of total retail sales* (%)

1997 2007

Food 41.0 40.9

Department stores 9.2 7.6

Clothing & soft goods 6.6 6.5

Household goods 13.6 15.6

Recreational goods 4.7 3.6

Hospitality & services 15.1 16.1

Other retailing 9.8 9.7

*In nominal seasonally adjusted terms. Source: Australian Bureau of Statistics, Economics@ANZ

Going forward, growth rates will vary across these different segments. We expect real sales growth to be slightly stronger for clothing and soft good retailers and for other retailers (mainly pharmacies), with weaker growth for the food-oriented segments of hospitality and services and food retailers. The factors affecting each segment are discussed in more detail below.

Growth rates have also varied greatly between larger and smaller retailers over the past four years, with large retailers consistently outperforming their smaller competitors (excepting a brief period in early 2006). Large retailers and chains enjoyed nominal growth of 9.9% p.a. in 2007, the strongest in more than a

Consumer confidence has plummeted in recent months

Global financial market turmoil is increasing the cost of credit and reducing its availability for local borrowers

Food retailers dominate Australia’s retail landscape

Large retailers have outperformed small retailers over the past four years


Page 5

decade, while sales by small retailers grew by just 4.9% p.a. In the longer term, sales growth for small retailers has been more volatile than for larger retailers over the past decade, and has included periods of actual decline.

Looking forward, as consumers reign in their spending in 2008, smaller retailers are likely to face greater risk and volatility again, particularly those relying on more discretionary consumer purchases.

Retail sales forecasts, annual % change

Nominal Real Retail sector

2008f 2009f 2008f 2009f

Food 5.2 4.4 2.3 1.7

Department stores 4.5 4.2 2.7 2.4

Clothing & soft goods 4.5 4.3 3.7 2.8

Household goods 4.0 3.9 3.1 3.1

Recreational goods 4.6 3.6 3.0 2.0

Hospitality & services 4.6 5 1.2 1.7

Other retailing 6.9 3.9 3.9 1.9

TOTAL 5.0 4.3 2.6 2.1

Source: Economics@ANZ

Large and small retailers

-4

-2

0

2

4

6

8

10

12

14

95 96 97 98 99 00 01 02 03 04 05 06 07 08

Large

Small

annual % change (trend)



Page 6

Food retailers The food sector includes supermarket and grocery stores, specialist food retailers, liquor retailers and takeaway outlets. Overall, this sector was the second strongest performer in 2007 (after household goods) with annual sales growth of 8.8% (nominal). Looking forward, we expect annual sales growth for food retailers to ease to 5.2% in 2008. In particular, sales of discretionary food and grocery items are likely to suffer the slowest growth as successive interest rate hikes and higher prices for petrol and other necessary items bite into consumers’ wallets against a backdrop of softening consumer sentiment.

Supermarket sales growth remains robust, but spending growth on takeaway food is declining slowly

0

3

6

9

12

15

03 04 05 06 07 08

Supermarket and Grocery Stores

Takeaway

annual % change (trend), nominal

By subcomponent

-10

-5

0

5

10

15

20

99 00 01 02 03 04 05 06 07 08

Small

Large


By size of retailer

Source: ABS

Indeed, consumer spending on the most discretionary food component, takeaway food, has already eased. Since reaching a peak of 9.7% in August 2007, annual sales growth for takeaway food has almost halved to its current 5.0%. In contrast, supermarket and grocery store sales growth is currently running at 8.5% per annum, close to its fastest pace since 2001.

On the price front, food prices have been rising for a variety of reasons including: poor food crops globally; increased use of grains for biofuels; higher farm input costs; growing demand for protein and meat in Asia as incomes rise; and a local drought and its after-effects. Retail grocery prices will be subjected to further scrutiny with an inquiry currently under way by the ACCC. The ACCC is due to report on its findings to the Government by 31 July 2008.

Looking at marketing trends in the food retail sector, supermarkets continue to push private label products. These are now estimated to account for 20% of the total packaged grocery market.1 Most supermarkets continue to offer a mix of low-priced generic, mid-priced and premium ranges, although some have chosen to specialise at one end of the market (e.g. home brand products only) or the other (e.g. stocking mainly premium end products). In recent years, much of the growth in supermarket sales can be traced to the premium end. However, this growth run is likely to end as consumer spending is reined in.

With the rise in prominence of carbon emissions and ‘green credentials’, supermarkets like many other consumer oriented businesses are seeking ways to improve their environmental standing. For retailers, energy use through lighting, heating and cooling is the most obvious target. For food retailers in particular, refrigeration is also a consideration. With electricity prices already up, and more increases likely when carbon emissions trading is introduced from

1 Jackson S, “Surviving the supermarket shelf squeeze” FoodWeek 28 November 2007.

Takeaway food sales have eased recently

Sales of discretionary food items are particularly susceptible as consumers rein in spending

Retail grocery prices are the subject of an ACCC inquiry


Page 7

2010, supermarkets nationwide will be seeking ways to reduce their environmental footprint and their power bills.2

Department stores Department stores accounted for around 7.6% of total retail sales in 2007. Since reaching a trough in late 2005, department store sales growth has accelerated to 7.3% pa in October 2007. Restructuring has allowed the sector to take advantage of a buoyant retail environment, backed by a strong labour market and household incomes.

Department store sales have grown strongly since 2005

-2

0

2

4

6

8

10

99 00 01 02 03 04 05 06 07 08

Department Stores


Source: ABS

In 2007, department stores averaged nominal sales growth of 5.2%. We expect this to ease to 4.5% in 2008 reflecting a less benign retail environment as higher interest rates and equity market volatility hit consumer disposable incomes and wealth. Already, the data for 2008 reveals some slowing in department store sales across all states and territories although Queensland (8.4% annual sales growth) and South Australia (6.4%) remain strong. At the other end of the spectrum, department store sales in the Australian Capital Territory are only growing by 1.9% per annum.

Top-end store strategies targeting the higher socio-economic demographic are likely to insulate department store sales to some degree, since these consumers have more money to spend on discretionary items, even in times of financial stress. In this regard, new outlet openings represent a vote of confidence in the sector’s prospects.

Recent marketing trends sweeping department stores include the development of retailer co-branded credit cards, with one chain recently introducing a card and another planning to introduce a facility in time for Christmas 2008. Other tactics, such as the ‘store within store’ concept, which involved the top department stores working closely in conjunction with fashion boutiques, continue to gain wider application. Similarly, ‘massclusivity’, which involves the sale of previously “exclusive” product lines on a mass scale, has become a popular tactic in Australia and internationally, with limited-edition women’s clothing lines being created by leading fashion designers, influential music acts and even models, for sale in mid-range department stores.

2 See ANZ Economic Outlook, March Quarter 2008 (p.21).

Recent department store strategies include co-branded credit cards, the ‘store-in-store’ concept and ‘massclusivity’

Department store sales growth peaked at 7.3% p.a. in Oct 2007


Page 8

Clothing and soft goods retailers Clothing and soft good retailers enjoyed nominal sales growth of 7.5% in 2007. Smaller clothing and soft good retailers did particularly well, with sales growth of 9.7%, while franchised and chain store sales grew by 6.0%.

Looking forward, we expect sales growth for clothing and soft good retailers to ease, but remain robust, at 4.5% in 2008. Smaller retailers will face the greater risks, being less able to absorb any contraction in margins as sales slow.

With regards to prices, a relatively strong Australian dollar throughout 2008 will continue to provide a disinflationary impetus to imports. However, this will partly be offset by rising labour and other costs in Asian manufacturing countries such as China, which are experiencing inflationary pressures of their own.

Sales growth for both small and large clothing retailers is decelerating

-6

-3

0

3

6

9

12

15

03 04 05 06 07 08

Clothing

Soft Goods


By subcomponent

-15

-10

-5

0

5

10

15

20

99 00 01 02 03 04 05 06 07 08

Small

Large


By size of retailer

Source: ABS

Household good retailers Household good retailers have enjoyed booming sales over the past few years including growth of 9.4% in 2007, the strongest of all the retail categories. However, that strength has largely been confined to retail chains selling electronic appliances. In particular, flat-screen televisions (both plasma and LCD screens) and gaming consoles have skyrocketed in popularity. Demand continues to be driven by the release of new technologies onto the market, the ongoing move towards digital broadcasting, and boosts to discretionary income. Ongoing technological improvements are delivering higher quality products to consumers at lower prices. In addition, a strong Australian dollar has added downward pressure on prices.

In contrast to the double digit growth being enjoyed by household goods retail chains, smaller retailers are languishing. Their sales growth declined by 3.4% in 2007 (relative to 2006).

Looking forward, we expect sales growth for this sector to ease to 4% in 2008. There will, however, be some bright spots for the technology sector with the recent war between Blu-Ray and HD DVD formats being resolved in favour of the former. Similarly, large sporting events such as the upcoming Olympic Games typically provide some impetus for consumers to upgrade their televisions.

With regards to household goods such as furniture, hardware and houseware, retailers will be awaiting a pick-up in the dwelling cycle. On this front, higher interest rates are likely to delay a potential recovery in dwelling construction. At some stage, however, dwelling construction will need to catch up to underlying

Small and large clothing retailers have enjoyed good growth rates

Large household good retailers have enjoyed strong sales growth …

… but smaller household goods retailers are already struggling


Page 9

demand. Given the current economic outlook for Australia, we expect this to begin to occur after interest rates ease in 2009 with residential construction picking up again in earnest in 2010.3

Contrasting fortunes for large and small household good retailers

-10

-5

0

5

10

15

20

03 04 05 06 07 08

Furniture

Hardware and houseware

Domestic appliances andrecorded music


By subcomponent

-10

-5

0

5

10

15

20

25

30

99 00 01 02 03 04 05 06 07 08

Small

Large


By size of retailer

Source: ABS

Recreational good retailers The nominal value of sales by recreational good retailers increased by 6.2% in 2007. This was led by an exceptional 19.3% increase in sales by large retailers and chains. In marked contrast, sales by small retailers increased by only 2.2%. By component, sales were particularly strong for sporting equipment and merchandise, as well as for photographic equipment.

In 2008, we expect sales growth for this sector to ease to 4.6%, in line with the more general deceleration in consumer spending.

Large retailers enjoyed a bumper 2007

-10

-5

0

5

10

15

20

03 04 05 06 07 08

Newspaper, books and stationery

Other


By subcomponent

-15

-10

-5

0

5

10

15

20

25

99 00 01 02 03 04 05 06 07 08

Small

Large


By size of retailer

Source: ABS

3 See ANZ Australian Property Outlook – January 2008

Large recreational good retailers have enjoyed especially strong sales growth.


Page 10

Hospitality and services retailers The hospitality and services sector recorded relatively modest sales growth of 4.7% in 2007. Large operators and chains enjoyed the largest gains with 10.6% sales growth, while turnover by small operators increased by only 3.4%.

By subcomponent, the hotel and licensed club segment appears to have adapted well to the full smoking bans now in place in most Australian states, with sales initially falling in early 2007 before recovering by mid-year and growing at an accelerating annual rate through spring and summer. Of more concern for them is the increasing political pressure on the gambling industry with the Commonwealth Senate recently launching an inquiry into a plan to impose higher taxes on poker machines in clubs and pubs. Similar pressure is evident at the state level, with the Victorian Government set to ban automatic teller machines from clubs and pubs with poker machines from 2013.

On a positive note for the small video hire segment, the war between Blu-ray and HD DVD formats has been resolved in favour of the former. This ends a period of uncertainty for video hire outlets who previously could not commit to either format.

Looking forward, regulatory changes and a weaker environment for discretionary sales are likely to curb growth in the hospitality and services sector. We expect nominal sales growth of 4.6% in 2008.

Growth in consumer spending at cafes and restaurants is easing

-10

-5

0

5

10

15

20

25

30

03 04 05 06 07 08

Hotels and clubs

Cafes and restaurants


By subcomponent

-5

0

5

10

15

20

25

99 00 01 02 03 04 05 06 07 08

Small

Large


By size of retailer

Source: ABS

Other retailers The other retailing category primarily consists of pharmaceutical and cosmetic retailers but also includes such diverse activities as watch, jewellery, antique and flower retailing. In 2007, other retail sales increased by 3.9%, the weakest of all the retail categories. There was, however, a late surge in monthly sales, with double digit annual sales growth achieved by Christmas.

This year, we expect nominal sales growth of 6.9%. Much of this however, reflects higher prices, with record gold and metal prices affecting jewellery retailers. In volume terms, sales for these more discretionary sectors are likely to be affected by higher interest rates and softening consumer confidence. In contrast, pharmaceutical sales are of a more essential nature and should hold up reasonably well.

Hotels and clubs have largely recovered from the sales disruption of smoking bans


Page 11

Growth in other retail sales picked up in the second half of 2007

-10

-5

0

5

10

15

20

25

30

03 04 05 06 07 08

Pharmaceuticals and Cosmetics

Watch and Jewellery


By subcomponent

-15

-10

-5

0

5

10

15

20

25

99 00 01 02 03 04 05 06 07 08

Small

Large


By size of retailer

Source: ABS


Page 12

Appendix: nominal retail sales, States and Territories

0

2

4

6

8

10

12

99 00 01 02 03 04 05 06 07 08

NSW


-2

0

2

4

6

8

10

12

14

99 00 01 02 03 04 05 06 07 08

Vic


0

2

4

6

8

10

12

14

16

99 00 01 02 03 04 05 06 07 08

Qld


0

2

4

6

8

10

12

14

99 00 01 02 03 04 05 06 07 08

SA


0

2

4

6

8

10

12

14

16

99 00 01 02 03 04 05 06 07 08

WA


-4

-2

0

2

4

6

8

10

12

14

16

99 00 01 02 03 04 05 06 07 08

Tas



Page 13

0

2

4

6

8

10

12

14

99 00 01 02 03 04 05 06 07 08

NT


-2

0

2

4

6

8

10

12

14

16

99 00 01 02 03 04 05 06 07 08

ACT



Page 14

Contacts ANZ Research

Saul Eslake Fiona Allen Chief Economist Business Manager +61 3 9273 6251 +61 3 9273 6224 [email protected] [email protected] Tony Pearson Mark Rodrigues Riki Polygenis Dr. Alex Joiner Head of Australian Economics Senior Economist,

Australia Economist, Australia

Economist, Australia

+61 3 9273 5083 +61 3 9273 6286 +61 3 9273 4060 +61 3 9273 6123 [email protected] [email protected] [email protected] [email protected]

Julie Toth Wain Yuen

Senior Economist, Industry

Economist, Industry

+61 3 9273 6252 +61 3 9273 6295

[email protected] [email protected]

Amy Auster Jasmine Robinson Amber Rabinov

Head of International Economics

Senior Economist, International Economist, International

+61 3 9273 5417 +61 3 9273 6289 +61 3 9273 4853 [email protected] [email protected] [email protected] Paul Braddick Ange Montalti Dr. Alex Joiner Stephanie Wayne Head of Financial System Analysis

Senior Economist, Financial System Analysis

Economist, Financial System Analysis

Research Analyst, Financial System Analysis

+61 3 9273 5987 +61 3 9273 6288 +61 3 9273 6123 +61 3 9273 4075 [email protected] [email protected] [email protected] [email protected] Warren Hogan Katie Dean Head of Markets Research Senior Economist,

Markets

+61 2 9227 1562 +61 3 9273 1381 [email protected] [email protected]

ANZ Markets Warren Hogan Sally Auld Tony Morriss Mark Pervan Katie Dean Head of Markets Research Senior Interest Rate Strategist Senior Currency Strategist Senior Commodity

Strategist Senior Economist, Markets

+61 2 9227 1562 +61 2 9227 1809 +61 2 9226 6757 +61 3 9273 3716 +61 3 9273 1381 [email protected] [email protected] [email protected] [email protected] [email protected]

David Croy Patricia Gacis Strategist Market Strategist +44 20 7378 2070 +61 2 9227 1272 [email protected] [email protected]

Research & Information Services

Mary Yaxley Marilla Rough Manesha Jayasuriya Head of Research & Information Services

Senior Information Officer Information Officer

+61 3 9273 6265 +61 3 9273 6263 +61 3 9273 4121 [email protected] [email protected] [email protected]

ANZ New Zealand Cameron Bagrie Khoon Goh Philip Borkin Chief Economist Senior Economist Economist +64 4 802 2212 +64 4 802 2357 +64 4 802 2199 [email protected] [email protected] [email protected]

Sean Comber Steve Edwards Kevin Wilson Economist Economist Rural Economist +64 4 802 2286 +64 4 802 2217 +64 4 802 2361 [email protected] [email protected] [email protected]


Page 15

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Industry Report: Retail Trade - Mar08.pdfinterest rate rises through 2007 and 2008, which are designed to cool demand and therefore ease some of the pressure on prices. Also, inflation

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