Shopping centre group Vicinity Centres has confirmed that luxury sales across its portfolio continued to trend lower in the first half of FY25.
However, the company added that the rate of sales decline across luxury has eased over the first half compared to prior periods.
“It is important to note that specialty luxury retailers have enjoyed almost 30 per cent growth in sales per square metre since 2019 and that the category remains highly productive, with average sales per square metre of c.$60,000,” the company added.
Excluding the impact of luxury on Vicinity’s specialty and mini major stores “highlights even greater resilience and shopper confidence to spend" – the property firm reported – despite the ongoing cost of living pressures faced by Australian households.
“This is illustrated by strong sales growth across our more discretionary retail categories, such as homewares (up 4.3 per cent), apparel and footwear (up 3.8 per cent) and jewellery (up 2.8 per cent).”
Vicinity’s total portfolio of retail sales were up 2 per cent for the first half, hitting 2.7 per cent in the second quarter.
Outlet portfolio and CBDs outperformed, with sales up 6.5 per cent and 8.3 per cent in November and December, respectively.
The company also reported strong momentum in Black Friday sales – or what it called ‘Black November’ sales – with specialty and mini major sales in November up by more than 7 per cent on the prior year, or up 5.5 per cent when including luxury.
“Additionally, the month of December was up almost 5 per cent, indicating a solid and extended Christmas trading period,” Vicinity reported.
“Our outlet portfolio has proven resilient through economic cycles, recording retail sales growth for each consecutive quarter since the conclusion of the pandemic (i.e., FY22).”
“Furthermore, over the same period, annual sales achieved by the outlet portfolio have grown from almost $1.9 billion to in excess of $2.7 billion.”
According to Vicinity Centres, outlets are discretionary retail assets, however their appeal to value-conscious shoppers makes conversion to sales much higher.
“From a retailer perspective, outlets are considered to be a critical component of their distribution network, given the asset’s comparably lower-cost operating model as well as the opportunity to clear excess stock, thereby reducing waste.”
Looking ahead, Vicinity declared a positive outlook for its retail property sector, “supported by population growth and limited new supply of retail”.