Australian Bureau of Statistics, hourly pay rates excluding bonuses, as measured by Australia's wage price index (WPI) rose by less than 2.1% in the year to March 2018, which is below levels last seen in previous recessions.
According to a report by Credit Suisse wage growth headwinds include:
- Unemployment is above the 5% wages pressure point
- Lower unionisation
- Increased labour flexibility
- Rising female participation
- Ageing population
So, what does this mean for retailers? Not only do people have less money to spend, and vast amounts of debt, unless a retailer has a competing and functional online presence, they are also losing out to offshore and local retailers who have risen to the challenge.
Companies feeling the pressure have been JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Myer Holdings Ltd (ASX: MYR).
