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.

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

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