Chart of the week: Why large retailers and chain stores can pay their rents
The retail property picture is improving for landlords that have a tenant mix favouring large retailers and chain stores, rather than boutique operators.
The graph below, prepared by Westpac, shows how the two opposite ends of the retail market (in terms of size and reach) are diverging on retail sales following the release of August retail sales data last week.
Click to enlarge“Small retailers have borne the brunt of the recent softening in sales with a 0.7% decline in August following July's 1.4% fall," noted Westpac senior economist Matthew Hassan.
“Large retailers recorded a milder 0.5% dip in July and a 0.8% rise in August. Much of the gap likely reflects the resilience in basic food retail, which is dominated by the big supermarket chains, and the rebound in department store sales in August.”
Overall retail sales remained flat in August, up just 0.2% after a 0.8% decline in July, a 1.2% rise in June and a 0.6% rise in May.