MENU

Employment rise bodes well for retailers

According to data released by the Australian Bureau of Statistics, the brick-and-mortar retail sector still has plenty of fight left in it against the forces of online retailing. The figures show that around 47,000 jobs were added to the sector in the year to May, coinciding with a 3.1% increase in retail turnover when compared to the same time last year.

Retailers shape up and fight back

Just as investors all over the world began to doubt the future of physical retail stores, some of Australia’s largest retailers have returned to positions of profitability — having made necessary alterations to their business models.

For instance, JB Hi-Fi (ASX: JBH) and Harvey Norman (ASX: HVN) have both pushed their online stores more aggressively and have refocused on selling higher margin goods. Myer (ASX: MYR) and David Jones (ASX: DJS) have taken a similar approach, and have recently ceased selling goods such as DVDs, CDs and electronic games, to instead stock more profitable products.

The increase in job numbers in the industry shows that confidence is returning to the sector, and that businesses are confident that their altered business models can be sustained in the long term.

Huge positive for landlords as well

The data should also be noted as a huge positive for landlords such as Westfield Group (ASX: WDC), Stockland (ASX: SGP) and GPT Group (ASX: GPT), which all benefit significantly from the higher profitability of retailers.

Meanwhile, The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More Reading

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.