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Highlights
- Wesfarmers CEO notes shrinking shopping baskets
- Cost pressures weighing on small businesses
- Interest rate outlook could influence business sentiment
Australia’s retail landscape is showing signs of shifting consumer behaviour, with Wesfarmers Limited (ASX:WES) CEO Rob Scott highlighting that shoppers are becoming more cautious with their spending. Speaking at a recent industry event, Scott pointed out that while consumers overall remain in “OK shape,” those from lower-income households, particularly families with mortgages, are feeling the financial strain.
The most notable trend emerging, according to Scott, is that customers are placing “fewer items in the basket.” This indicates a shift in consumer habits likely driven by rising living costs and increased mortgage repayments. Despite this, there is still resilience in some segments—especially among households not burdened by home loans, which continue to show spending capacity.
On the business front, Scott emphasized that small to medium-sized enterprises are under growing pressure. Operating costs have surged across the board, from energy prices to labor expenses. These pressures are particularly critical for business-to-business (B2B) customers who form a significant part of the Wesfarmers customer base.
Scott also remarked that any potential easing of interest rates would provide much-needed relief, especially for B2B segments and the residential construction sector. A rate cut scenario could positively impact operations for subsidiaries such as Bunnings, which caters heavily to both retail and trade customers. In this context, broader economic indicators, such as those tracked in the ASX200, will be closely watched for signs of recovery or further pressure.
For investors and market observers focusing on income-generating assets, this environment continues to underline the importance of identifying strong ASX dividend stocks that can offer some stability amid fluctuating consumer confidence.
Wesfarmers’ diversified portfolio, which spans retail, chemicals, and industrials, gives it a unique vantage point on both consumer and business activity across Australia. While parts of its business are feeling the impact of economic tightening, others may benefit if economic conditions improve or interest rates decline in the months ahead.
The company’s insights offer a snapshot of broader consumer and business sentiment within the ASX200 landscape, providing useful context for understanding the current macroeconomic pressures shaping Australia’s corporate outlook.
