Fashion retail set to brighten

Fashion retail looks set benefit from forthcoming tax cuts despite last month's 0.25 per cent interest rate hike, according analyst firm Jones Lang LaSalle.
The real estate giant has released the results of its March survey of retailer sentiment, whose respondents - primarily comprising medium to large chains and accounting for 4.1 million square metres of floor space across 5200 locations nationally - were "more optimistic than pessimistic" about future trading prospects.
The net balance of positive responses was 11 per cent compared to minus four per cent for the preceding survey last September, confirmed Jones Lang LaSalle research director David Snoswell.
Sentiment had been buoyed by a "Fuel prices caused retail trade to be rough during the second half of last year and dented consumer sentiment. However, retail sentiment has improved as consumers are growing accustomed to higher fuel costs," Snoswell said
While fuel prices would continue to rise and it was important to note that the survey had taken place prior to last month's 0.25 per cent interest rate hike, these factors would be counteracted by tax cuts set to kick in on July 1.
"I would think of all the retail sectors it would probably be fashion that would see the most benefits from tax cuts as higher income earners will have the greater propensity to spend money on fashion, particularly the mid-range to high-end of the fashion market."
Snoswell said the value end of the market would most likely remain steady, as customers at that end of the market would continue to shop for basic necessities.
"I suspect that across the fashion industry the warmer weather will also play an important role in consumer sentiment and retail activity."