Australia's retailers have had a rough trot in recent years. Not only have they had to contend with low consumer confidence, they've also had to battle against the rising tide of online shoppers, yet this may only be the beginning of the sector's woes.
More and more international retailers are tipped to expand onto Australian soil to take advantage of the low Australian dollar and willingness of Australians to spend on quality, world-class brands. As highlighted by The Fairfax Press a new report by Deloitte, titled Powers of Retailing, showed that just 37 of the world's top 250 retailers by revenue are currently operating in Australia – but this is a number which appears to be increasing.
Already, we've seen companies such as H&M, Zara and Victoria's Secret having invested in Australia since The Gap opened its first store in Melbourne five years ago. More recently, Sephora also expanded down under, posing as a significant threat to Australia's already-struggling department store giants, David Jones and Myer Holdings Ltd (ASX: MYR).
Of course, there are a number of reasons to suggest that consumer spending could pick up in 2015, including lower petrol prices as well as the increasing likelihood of one or two interest rate cuts. However, whether that spending would benefit Australian retailers such as JB Hi-Fi Limited (ASX: JBH) and Super Retail Group Ltd (ASX: SUL), or international rivals remains to be seen. As Deloitte highlighted in its report, "What should be of concern to Australian retailers is that 85% of the top 250 retailers aren't yet operating in Australia – meaning competition is only likely to increase".
