Research Report: Inflation and Employment in Australian Retail

This research report examines the impact of inflation and employment rates on the Australian retail industry. It begins with an executive summary highlighting Australia's economic growth and the retail sector's major components, including food, household goods, clothing, and online stores. The report delves into the literature review, providing an overview of the Australian retail industry and analyzing the relationship between employment, inflation, and retail growth. The study employs a deductive research approach with a realism philosophy to analyze both objective and subjective variables, using a combination of positivism and interpretive data analysis. The report includes figures illustrating retail employment trends and the impact of inflation on the industry. The findings reveal the influence of employment and inflation on retail performance, offering insights into the industry's challenges and opportunities. Finally, the report concludes with recommendations and acknowledges the limitations of the study.

Research report
(Impact of inflation and employment on the
retail industry of Australia)

Executive summary
Australia is been listed among one of the wealthiest Asia Pacific countries and had
experienced remarkable economic expansion in the past two decades. The current gross
margin comprised up to 15% of the final sales and retailers are getting only 6.5% of the final
sales. The major components of the retail sector are food 44.9%, household goods 19.9%,
clothing footwear, and personal accessory 9.0% and online stores are having 2.0 %
contribution. In addition to this, these items are having 30% of the total CPI of the country
and influencing the retail inflation.The current gross margin of retailers in Australia is 34% of
the final sales price and the breakdown of it include the 6.5% for retailer and 13 of labour
cost. The retail industry of Australia is offering approx 146,000 or 1.22% of overall jobs.

Table of Contents
1. Introduction............................................................................................................................1
1.1 Introduction......................................................................................................................1
1.2 Aim and objectives...........................................................................................................1
1.3 Research questions...........................................................................................................1
1.4 Problem statement............................................................................................................2
2. Literature review....................................................................................................................2
2.1 Introduction......................................................................................................................2
2.2 Overview of Australian retail industry.............................................................................2
2.3 Impact of employment and inflation on retail industry of Australia................................3
2.4 Impact of inflation on growth of retail industry...............................................................5
2.5 Hypothesis........................................................................................................................6
3. Research methodology...........................................................................................................6
3.1 Introduction......................................................................................................................6
3.2 Research philosophy........................................................................................................6
3.3 Research approach...........................................................................................................6
3.4 Research type...................................................................................................................7
3.3 Research design................................................................................................................7
3.4 Data collection.................................................................................................................7
3.5 Data analysis....................................................................................................................8
3.6 Ethical consideration........................................................................................................8
4. Data analysis..........................................................................................................................8
4.1 Descriptive analysis.........................................................................................................8
5. Discussion and findings.......................................................................................................10
Findings................................................................................................................................12
6. Conclusion, recommendations and limitations....................................................................13

6.1 Conclusion......................................................................................................................13
6.2 Recommendations..........................................................................................................13
6.3 Limitations.....................................................................................................................14
References................................................................................................................................15

List of figures
Figure 1: Retail employment in Australia..................................................................................4
Figure 2: Impact of inflation on retail industry..........................................................................5
Figure 3: Trend analysis...........................................................................................................10
Figure 4: Unemployment rate in Australia...............................................................................11
Figure 5: Impact of inflation of retail sales..............................................................................12

1. Introduction
1.1 Introduction
The employment rate and inflation are key elements for any nation and industry that
influence the growth and provide the knowledge about the potential of the particular area in
the overall functions of the economy. The retail industry of Australia is having the significant
impact on the employment and changes in the inflation rate (Nguyen & Duncan, 2017). The
demand for retail products and services is increasing and the retail organizations are looking
to expand their business by developing the infrastructure and effective utilization of human
resources. The research will analyze the impact of employment and changes in the inflation
rate in the retail industry of the country and identify the key factors that are having the direct
or indirect impact on the growth of the industry (Bajada, 2017). The current growth rate of
the retail industry of Australia is 2.4% and retail industry of the nation is growing with 11.2%
(Próchniak, 2018).
1.2 Aim and objectives
Aim
The aim of study is to identify the impact of employment rate and inflation of the
growth and sustainability of the retail industry of Australia.
Objectives
 To assess the impact of employment on retail industry of Australia
 To evaluate the relationship between employment and inflation for retail industry
 To identify the impact of inflationon growth of retail industry of Australia
1.3 Research questions
1. How the employment impacts the functions of retail industry of Australia?
2. What factors are having direct impact on inflation and employment of retail functions of
country?
3. Why changes in employment and inflation influence the retail growth and operations?
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1.4 Problem statement
These items are having 30% of the total CPI of the country and influencing the retail
inflation. The research will focus on retail employment rate and changes in the inflation rate
due to high demand and consumption of the goods and services. The changes in import and
export functions are also having the direct impact on the pricing structure of the retail goods
(Pandya&Sisombat, 2017). The study will analyze the retail price and exchange rate
relationship to identify the impact on employment and inflation rate of the country. Apart
from that, cost structure and elements like transportation, operational expenses and changes
in the profit margin affect the overall employment growth and functions that affect the retail
functions (Bernanke, Laubach, Mishkin & Posen, 2018). The current gross margin comprised
up to 15% of the final sales and retailers are getting only 6.5% of the final sales. The study
will evaluate the growth of retail industry and contribution in the generation of new
employment opportunities for the local people (Roobavannan, Kandasamy, Pande,
Vigneswaran &Sivapalan, 2017).
2. Literature review
2.1 Introduction
Literature review is the section which includes the concepts and theories related to the
subject matter. It helps in developing a strong theoretical and conceptual base of the study by
reviewing the past studies conducted by renowned researcher and scholars on similar topics.
The current review of literature would elaborate the concepts about the impact of
employment and inflation on retail industry of Australia.
2.2 Overview of Australian retail industry
According to Heeringa, West & Berglund, (2017), Australia is been listed among one
of the wealthiest Asia Pacific countries and had experienced remarkable economic expansion
in the past two decades. The Australian economy is the mixed market economy having the
GDP of about A$ 1.69 trillion in the year 2017. The strong market democracy of the country
is been benefitted by the effective governmental system which allows vibrant development of
entrepreneurship. It has been seen that the labor market of Australia is well supported by the
flexible and modern employment code (Bernanke,& et al., 2018). The employment growth of
this industry is about 12,167 per month. According to analysis, the retail industry of the
country is having the significant impact on the growth trends of the nation and contributes
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approx 10.7% in the overall GDP (Nath&Sarkar, 2018). The retail industry output is
increasing as the purchasing power of the population is increasing. The major components of
the retail sector are food 44.9%, household goods 19.9%, clothing footwear, and personal
accessory 9.0% and online stores are having 2.0 % contribution. From the last two decades,
the growth of the retail industry is positive and implemented the long terms structural
changes (Schofield& et al., 2018). There are various organizations that are taking entry into
the retail business in the local and international market (Gurran, Norman & Hamin, 2016).
The alcohol and food sector is having the significant contribution to the employment sector.
The home delivery and inventory operations are having the positive impact on the customized
business approach of retail industry.
2.3 Impact of employment and inflation on retail industry of Australia
According to the labor force reports, it has been seen that the employment had
increased from 29,000 to nearly about 12,620,700. The rate of unemployment had decreased
to 5.3% currently. The trends have recorded the remarkable change in the labor market and
depicted a positive result of the economy. However, the retail business of Australia had
experienced an improvement from 12.5% in 2012 to 16.2 % in the year 2017 (Labor force,
Australia, 2018,). Concerning the Australian economy or consumer spending growth, it has
been seen that the inflation and employment are moving hand in hand having influencing
impacts on each other and eventually on the retail industry (Australia Economy - overview -
Economy. 2018). The researcher had found that the relationship between the inflation and
unemployment had been an inverse correlation. With the increase in employment, the
demands in the labor market exceed the supply resulting in the rise in wage inflation. In
addition to this, these items are having 30% of the total CPI of the country and influencing
the retail inflation (Bhatnagar& et al., 2017). The current gross margin comprised up to 15%
of the final sales and retailers are getting only 6.5% of the final sales. The demand for skilled
labor is increasing in the retail market and having the positive contribution to the business
approach (Huang & Gamble, 2015).
From the graphical statics, it can be considered that the retail sector is having the
potential to generate the jobs and provide the opportunities for the new candidates to
contribute to the business growth of organizations. The improvement in employment and
income of people has the positive impact on the rate of inflation (Unemployment and retail
industry of Australia. 2018). The changes in the economic culture of the nation could
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influence the employment rate in the retail sector as the decline in sales and profitability
shape the decision of the retail organization to reduce the operational cost (Bishop&Cassidy.,
2017).
Figure 1: Retail employment in Australia
(Source: Employment in retail sector in Australia, 2018)
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2.4 Impact of inflation on growth of retail industry
Figure 2: Impact of inflation on retail industry
(Source: Retail inflation in Australia, 2018)
The retail industry of Australia is growing with rapid speed and having the significant
impact of the sales of consumer durable goods and food products. These goods are having
30% of the total market and 60% of the tradable market. The heavy inflation was measured in
the year 2010 as the retail inflation was close to the changes in the import and weighted
exchange rate (Hartigan& Morley, 2018). However, the 2010 retail inflation was lower than
the expected. Moreover, the graph suggests that the retail inflation was lower in the food and
alcohol sector. The leading organizations from the retail sector of Australia are looking to
make changes in exchange rate and utilization of information for managing the operations
(Retail inflation in Australia,2018). Apart from that, the customer structure in retail sector
and traffic that organization can able to generate through the sales can be beneficial for them
to maintain the labour cost and offer employment to the people (Chua & Robinson, 2018).
The inflation affects the final price of goods and services of the retail sector but it does not
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have any negative impact on the sales. The current gross margin of retailers in Australia is
34% of the final sales price and the breakdown of it include the 6.5% for retailer and 13 of
labour cost (Ballantyne & Langcake, 2016).
2.5 Hypothesis
What factors are having direct impact on inflation and employment of retail functions of
country?
H0: There is no impact of employment and inflation on the retail growth and performance in
Australia?
H1: There is significant impact of inflation and employment on the retail business and
employment in Australia?
3. Research methodology
3.1 Introduction
Research methodology is an important section of a research which signifies the
methods and tools used throughout the study. It includes various elements which provide with
ideas about how the research is been carried out and what methods are been used (Walliman,
2017). Research philosophy, research approach, research design, data collection, data
analysis, and ethical considerations are some of the common elements of research
methodology.
3.2 Research philosophy
In order to manage the research and maintain the flow, there are majorly three types
of philosophies are used such as interpretive, positivism and realism. For the current research
about the impact of employment and inflation on retail industry of Australia, the researcher
has selected the realism philosophy that will support to analyze the both subjective and
objectives variables of the study to increase the effectiveness. This philosophy is helpful for
driving the valid outcome from the study (Cumming & Johan, 2016). The positivism data
will help to analyze the variables that have been reviewed earlier. The interpretive data will
help to analyze the rational from the collected data.
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3.3 Research approach
In the opinion of Rautiainen, Sippola & Mättö, (2017) research approach helps an
investigator to explore its views from different suppositions to a specific manner to collect,
evaluate and interpret the facts and information concerned with the subject matter. There are
two major types of approach such as deductive approach and inductive research approach that
assist the researcher in developing a proficient framework. The researcher in the current
study would make use of deductive research approach as it allows evaluating the hypothesis
and reaching the end results (Robinson, Nguyen & Wang, 2017). The approach would help in
making effective hypothesis out of the facts and information of the subject matter of
relationship between employment and inflation that have impact on the retail industry.
3.4 Research type
Type of search is based on three major elements such as segmentation, barriers and
drivers. The research could use quantitative and qualitative research type for conducting
study. For the current research for analysis of impact of employment and inflation on retail
industry of Australia, the researcher has chosen mix type of research which will consider both
quantitative and qualitative aspects of research (Oliver & Yu, 2018). This method of research
type has supported the researcher to fill the gap in the finding by using the statistical data for
managing the research outcome.
3.3 Research design
The research design is been defined as a sketch of the ways in which the study is to be
carried out. According to Yin (2017), it is the picture of various methodologies and aspects to
be followed by the investigator during the study. The research design is mainly classified into
casual, exploratory and descriptive research design. In the current research, the descriptive
research design would be applied based on the nature and objective of the study. It would
help in drafting an effective hypothesis and extract the best outcome out of the research about
the employment and inflation data that have direct and indirect impact on the retail business
of Australia.
3.4 Data collection
Data collection plays a significant role in any of the research as it helps in available
the best suitable facts and information related to the subject matter. Data collection is the
process of collecting the relevant data and information which could be used to conduct the
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