Market Update
Spending is now on a cyclical upswing
Melbourne retail bounces back. Dr. Tony McGough Partner, Head of Research & Consulting, Victoria
Will there be a Melbourne Cup boost? The next meeting of the RBA’s Monetary Policy Board completes on Melbourne Cup Day, will it provide more of a further bounce to the Victorian and wider Australian economy. After the latest inflation numbers not in 2025. Victoria is in the middle of an upswing in household spending as the economy recovers after a period of high inflation and rising interest rates to counter it. From a Covid low of 0.1%, rates rose to a high of 4.35% in November 2023, cooling the economy and consumer spending. However, 2025 has seen three interest rate cuts and a consequent uptick in peoples spending, helping to boost the retail sector. Spending is clearly now on an upward trend and should now be acting as a positive to growth in Melbourne’s CBD. But Melbourne will still get a Melbourne Cup boost, with its $500m plus contribution to the economy. Added to this Oasis and Metallica are performing to sellout crowds and its another busy spring month. Following on from the opening of Mecca last month Rodd and Gunn’s global flagship store has arrived in Melbourne, at 280 Little Collins Street. “The Lodge” is located to the rear part of the old department store which Mecca’s new flagship now occupies, and will offer not just a retail offering, but a members’ bar, dining room and wine cellar for a more casual experience; highlighting a real power block of retail in the centre of the city.
Whilst inflation surprised on the upside at 3.2% (and 3.0% core) so did unemployment at 4.5% (a four year high). Consequently, interest rates are going nowhere until 2026.
Rodd and Gunn global flagship store has arrived on Little Collins Street
2
3
Made with FlippingBook Ebook Creator