Savings revival would trim retail profits

Access Economics predicts a recovery in the savings rates of Australians would erode sales and profit growth for retailers. The economic researcher said that retail sales growth was already slowing in some states, and that if the national savings rates stop falling and household spending stops rising, there was potential for weaker growth in retail profits. Retail sales which accounted for 33 per cent of household income in 2000 has climbed to 36.5 per cent of household income in 2004, mainly at the expense of savings.