Fashion retailers should prepare for a challenging period over the coming months according to research from Illion.
The Australian business expectations survey found that profit expectations for Q3 2018 had plummeted 79.8% on a quarter-on-quarter basis after reaching a two year high in Q2 2018.
The report also signalled flagging sales and employment expectations for the September quarter with the sales expectation index falling 64.7% and employment expectations sliding 27.6%.
According to the survey, ongoing concern about household spending and weak wages growth have contributed to the negative outlook highlighted in the report alongside the predicted downturn in sales, profits and selling prices.
Illion economic advisor Stephen Koukoulas said the retail sector was a major area of concern with the actual sales index falling below zero for the first time since Q4 2014.
“The retail sector is the main area of concern with both expectations and the actual performance falling sharply.
“Actual sales were reported to be below zero, which is the first time it has been this low in nearly four years.
“The gloomy outlook for the retail sector also showed up in expected employment, which fell over 27 per cent in the last quarter.
“Taking the overall results at face value, the next two quarters are likely to see slower growth and profits.”