Myer Executive Summary

Myer is a mid-range to upscale Australian department store chain. They house a variety of products, including men’s, women’s and children’s footwear and clothing as well as cosmetics and fragrance and general electronics and other home wares.

This report will show an overview of the current state of the Australian economy and its management by the Federal government through examining economic indicators such as economic growth (GDP), unemployment, inflation and trade.

The figure obviously had not return to pre-crisis level. Moreover, recent commodity prices had fallen significantly which will affect Australia’s short and long term economy.

Myer sources its products from over 800 suppliers globally compromising 2400 brands, to provide customers with one of the broadest brand offerings by a single

The Australian PMI has been mostly below 50 with an average of 47.98 in past 12 months and an average of 47.94 this year, which suggests a likely contraction in manufacturing. Fluctuation is expected due to its volatile nature but a large percentage change is likely to drive the economy. A 14.03% growth in July is expected to lead to an increase in the coming month but contraction may continue in 2015-2016. From these PMI figures, Australia’s economy might not be performing at its best. The industry might suffer

2011). A depreciating Australian currency is potentially inflationary, the depreciation of the Australian dollar lead to high Australian inflation rates, it cause a loss of export markets and reduce demand for Australian currencies. In this way, Australia’s inflation rates and costs are higher than its overseas competitors, at the same time domestic goods in Australia would be more expensive (Edge, K 2009). As well as inflationary pressures in Australia will increase, as imports would now be more expensive. This may increase pressure on the RBA to raise interest rates to defend its inflation target. With the result that Australian multinational corporations would cause it lost their overseas’ markets and customers, profit which from overseas would be decline and also pay for more interest

Figure 1.2 annotates that the central bank’s use of the cash rate in managing the inflation rate as it directly correlates with Figure 1.3. In recent years the inflation rate has fallen below target and currently sits at 1.9%. Although this is below the RBA’s target of 2-3%, Figure 1.3 suggests that inflation has been gradually increasing since 2016, despite the RBA not having adjusted the cash rate the same 2016 as illustrated in Figure 1.2. Therefore, although it was expressed by the RBA in February their “continuing concerns about weak household consumption” (The Sydney Morning Herald. 2018), Australia is still easing towards its long-term equilibrium without the intervention of the central bank. However, Inflation is a benchmark for aggregate demand, and this is another important aspect of consideration which could be addressed with expansionary monetary policy in order to accelerate inflation. However, as can be seen in these graphs, there is no sense of urgency to implement expansionary monetary

Australia’s economy over the past decade has improved steadily. Over the 2004 – 2013 period, the GDP averaged at USD1.05 trillion1 and rise in GDP per capita from USD30,449 in 2004 to USD67,4732 in 2013.

Economic growth is defined as a quantitative sustained increase in a nation’s output, referring to the volume of goods and services produced, over a period of time, generally per annum. It is indicated by an increase in the real GDP, which implies a rise in a nation’s economic capacity. As such, Australia’s current economic growth rate is 3% (May 2016). Inflation refers to a sustained increase in the general level of prices over a period of time, usually one year. It is measured by the percentage change in the consumer price index (CPI), which encompasses the price of a normal, weighted basket of goods and services purchased by households in the nation. Another economic issue is that of unemployment, which consists of

Inflation can be described as the sustained increase in the general level of prices over a given period of time, usually one year. Inflation can have negative effects on many of the key economic outcomes such as economic growth, exports, international competitiveness and income inequality. Inflation is measured in Australia by the Consumer Price Index (CPI); the CPI outlines the movement in the prices of a basket of goods and services that are weighted according to their importance for the average Australian household. The annual rate of inflation is measured by the percentage change in the CPI over a period of a year, highlighted in Figure 3.1 .

GDP growth, unemployment figures, inflation rates and money aggregate figures are important interrelated indicators that can help to determine the health of the Australian economy. The patterns evident in these indicators represent practical expressions of economic health and can be seen as the result of action taken by the Reserve Bank to achieve the three key objectives:

The main issue in the article is the decline of the Australian dollar against the US dollar. Upon perusing it is understood that the Australian dollar is steadily declining during the current year. The economists said that this is due to the fall of commodity prices globally. The Australia is agriculture and resource based economy, and the Australian dollar heavily depends on commodity price and terms of trade. According to the IMF the reason for the falling commodity prices is the slowing of demand globally. It’s mentioned that Australia, Canada and New Zealand are the three of the worst performing currencies of 2015. In order to stimulate economy the Reserve Bank of Australia is planning to cut its rate to 1.5% before March 2016 to deal with lower GDP and low domestic demand that is increasing unemployment. Mining investment has slowed down, which reduced the value of iron ore, causing Capital imports to fall in Australia. If the dollar declines too far, then Australia’s import will be reduced and this is difficult for businesses. Another nail in the coffin for the Australian economy is the plan to raise the rates of UK and US which could further decline the value of AUD.

Outline: This article discusses the low inflation data that adds to the interest rate in the australian economy and highlighting its effects to the economy. Australia’s official inflation rate has risen at its slowest annual pace in nearly three years, adding pressure to the Reserve bank of australia to stimulate the economy. It is stated the figures of inflation has lifted by 0.2 per cent in the three months to March, bringing the annual rate to 1.3 per cent. Low inflation rates leads to no sustained income growth for the Australian workforce. Global oil prices have recently plummeted to five-year lows amid an oversupply pushing local petrol prices under $1 a litre in some areas, from around $1.30 in December.

Myer is one of the biggest departmental store chains in Australia. We know from their company snapshot in the 2015 Annual report that they operate more than 60 departmental stores located in cities all over Australia and that their stores are visited over a 130 million times by their customers each year. They have also established one the best know loyalty programs in retail called the MYER one which currently boasts more than five million members (Myer Holdings Limited 2015).

One of Australia’s most iconic brands has fallen from the ranks of the top two hundred public companies in Australia. Since late 2009 Myer has gone into a decline, with its stocks losing over 85% of its original value. As of the 9th of March, Myer was worth $363 million dollars (A far cry from its original and is one of the lowest performers in the share market with shares worth only 43 cents.