BUSN20019 Professional Project:Impact of Employment On Retail Industry

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).

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

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?

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).

Literature review

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.

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 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.

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 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)

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 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).

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?

Research methodology

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.

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.

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.

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.

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.

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 study effectively and reach towards the results (Arndt, Singhapakdi & Tam, 2015). Data collection is carried out in mainly two type i.e. primary data collection method and secondary data collection method. To conduct the current study, the researcher would make use of the secondary data collection method. The secondary data would be collected through different sources like books, journals, online publications, libraries, etc (Cregan, Kulik & Bainbridge, 2017). The research has been based upon secondary data and would be evaluated accordingly. The researcher has focused on secondary data related to the employment, inflation changes and utilization of sources in the retail industry of Australia. This has helped to meet thegoals and objectives of the research.

Data analysis

Evaluating the data helps in identifying the actual facts related to the research topic and helps in reaching towards the useful findings out of the same. The data analysis for this research would be conducted by using thematic analysis where specific hypothesis would be formulated and analyzed (Heeringa, West & Berglund, 2017). The researcher has compared the literature review findings and outcome of the secondary data analysis to meet the goals and objectives of study related to impact of employment and inflation of the retail industry. Relevant themes would be designed so that to meet the set aims and objectives of the research and extract reliable and valid findings from the same.

Ethical consideration

Ethical consideration is the manner of bringing the ethical standards and norms into consideration while initiating and throughout the study. It is important for the researcher to focus on the ethical consideration so that to maintain the authenticity of the study. The investigator would ensure efficient use of the information and no biasness would be included. Even it would be made sure that the entire research is free from any plagiarism (Ross, Iguchi & Panicker, 2018).

Data analysis

Descriptive analysis

Table 1: Employment and inflation data

Year	Employment	Inflation
2013	1231.9	2.45
2014	1229.5	2.51
2015	1279.9	1.51
2016	1226.9	1.25
2017	1286.9	1.97

The table is showing data about employment rate and inflation level in the retail industry of Australia. The data has been obtain through excel format for identify the values of mean, median and mode to justify the correlation and trend analysis to support the findings of the research.  The table suggest that, employment level is increasing with time and the level of inflation is decreasing.

Table 2: Descriptive analysis

Employment		Inflation
Mean	1251.002797	Mean	1.938
Standard Error	13.29891339	Standard Error	0.249688
Median	1231.894335	Median	1.97
Mode	#N/A	Mode	#N/A
Standard Deviation	29.73727436	Standard Deviation	0.558319
Sample Variance	884.3054863	Sample Variance	0.31172
Kurtosis	-3.1285445	Kurtosis	-2.42493
Skewness	0.623347316	Skewness	-0.1979
Range	60.0358412	Range	1.26
Minimum	1226.853572	Minimum	1.25
Maximum	1286.889413	Maximum	2.51
Sum	6255.013986	Sum	9.69
Count	5	Count	5
Confidence Level (95.0%)	36.92370298	Confidence Level (95.0%)	0.693244

The analysis suggests that employment and inflation rate changes have significant impact on the overall employment rate of retail industry. There are various factors that have direct indirect impact on the employment and inflation rate. The standard deviation suggests that the employment rate has major impact on the growth of retail industry.    

Table 3: Employment impact

	Employment	Inflation
Employment	1
Inflation	-0.25188	1

As per the analysis, the changes in the inflation rate are having significant impact on the employment rate of the retail industry.

Figure 3: Trend analysis

The tread analysis shows that the changes in employment level in retail industry and inflation rate are having significant relation as the changes in one affect the other one. The retail industry is trying to maintain the growth by using the technical tools and generating the jobs that has positive impact on inflation level.

Discussion and findings

Theme 1: Impact of employment on retail business of Australia

The analysis of data about employment in Australia suggests that the changes in the business approach of retail organizations in terms of the offering of goods and keep the customer informed about offers and value-added services has increased the job opportunities in the retail sector (McGuinness & Ortiz, 2016). The expansion of stores and services for maintaining the growth in the market has influenced organizations to increase the human resources capabilities. Moreover, the organizations are offering training and support to the members to understand the needs of the customers and make the decisions accordingly.

The study reveals that the rate of unemployment in the country is getting down which is good for the nation to organize the quality human resource and maintain the flow of the business sector. The analysis of employment in the retail sector is helping to understand that current unemployment rate of the country is less than 5% and retail sector is offering more jobs to keep the business operations as per the demand of the market.

Theme 2: Inflation on retail industry

The current inflation rate of the country is 1.9 which is higher than the last two years. The inflation has the significant impact on business and employment level of organizations. The inflation rate suggests the consumer spending power and habits of consumers for buying the goods and services. The inflation rate of the country is stable from last three years and having the vital impact on the business sector like retail. Apart from that, changes in inflation rate have the direct and indirect impact of other variables like political conditions, environmental situation and changes in the rate of interest as well as cash availability in the market.

Theme 3: Relationship between employment and inflation

The retail organizations in Australia are looking to expand the business and developing the opportunities for new jobs in the industry. However, the changes in the inflation and consumer spending power affect their efforts. To maintain the supply chain and demand for the goods and services in the market, the role of human resources is critical. The current inflation rate is 1.9 % and the employment rate is 9 % in the retail sector of the nation. The economic development and changes in the international market are also having the direct impact on the retail inflation and that affect the decision of the organization related to the planning of the employment. 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 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 and employment level.

Findings

The major finding of study from secondary data analysis involves that the inflation and employment are interrelated and have the significant impact on the sales and profitability of the retail organizations. The retail industry of Australia is growing with rapid speed and contributing in the GDP of the country. The key findings from literature review involves that, the consumer spending and economic changes are having the direct impact on the decision making of the retail organization to expand the business and increase the human resources.

However, the secondary data analysis shows that the retail business of Australia had experienced an improvement of 12.5% in 2012 to 16.2 % in the year 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 Australian economy is the mixed market economy having the GDP of about A$ 1.69 trillion in the year 2017. The key indicator of the economy of a nation is domestic spending of the consumers for purchasing of daily needs goods. The retail industry of Australia is offering approx 146,000 or 1.22% of overall jobs.

Conclusion, recommendations and limitations

Conclusion

From the above study, it has been carried out that inflation and employment have the significant impact on the retail sector of Australia. The higher rate of employment increases the power of spending of people that directly influence the inflation rate. Apart from that, the research has found out that the changes in the economic structure and business approach of retail sector also support in the generation of new job opportunity that is beneficial for industry and population.  The retail goods are having the direct impact on Consumer Price Index (CPI) that include the products like food, beverages, clothing, footwear, and household appliances as well as the alcohol.  These items are having 30% of the total CPI of the country and influencing the retail inflation. The current growth rate of the retail industry of Australia is 2.4% and retail industry of the nation is growing with 11.2%. From the last two decades, the growth of the retail industry is positive and implemented the long terms structural changes.

Recommendations

By considering the outcome of the above study, it can be recommended that the proper analysis of market opportunities and spending habits of the potential and existing customer the retail sector can expand the business. It is the responsibility of the national government and the HRD department to develop new jobs for local people which will support increasing the power of spending. In addition to this, it is also recommended to follow the economic changes and consumer trends to maintain the sustainability in business.

Limitations

Carrying out a research is not an easy task and includes various constraints into it. While conducting the study, the investigator came across the major constraints which were the time and budget which restricted the boundaries extensively. The limited budget restricted the researcher to access the relevant data related to the topic as many of the sources were charged. However, the investigator managed to overcome the issues by accessing the online libraries, journals and other sources which were free and most relevant to the topic.

References

Arndt, A. D., Singhapakdi, A., & Tam, V. (2015). Consumers as employees: the impact of social responsibility on quality of work life among Australian engineers. Social Responsibility Journal, 11(1), 98-108.

Bajada, C. (2017). Australia's Cash Economy: A Troubling Issue for Policymakers: A Troubling Issue for Policymakers. Routledge.

Ballantyne, A., &Langcake, S. (2016). Why Has Retail Inflation Been So Low?. RBA Bulletin, June, 9-17.

Bernanke, B. S., Laubach, T., Mishkin, F. S., & Posen, A. S. (2018).Inflation targeting: lessons from the international experience. Princeton University Press.

Bhatnagar, S., Cormier, A. K., Hess, K., de Leon-Manlagnit, P., Martin, E., Rai, V., ...&Sarker, S. (2017). Low inflation in advanced economies: facts and drivers. Bank of Canada= Banque du Canada.

Bishop, J., & Cassidy, N. (2017).Insights into low wage growth in Australia. RBA Bulletin, March, 13-20.

Chua, C. L., & Robinson, T. (2018). Why has Australian wages growth been so low? A Phillips curve perspective.Economic Record.

Cregan, C., Kulik, C. T., & Bainbridge, H. T. (2017). Differences in Well?being among People with Disabilities in Paid Employment: Level of Restriction, Gender and Labour Market Context. Social Policy & Administration, 51(7), 1210-1230.

Cumming, D., & Johan, S. (2016). Venture’s economic impact in Australia. The Journal of Technology Transfer, 41(1), 25-59.

Gurran, N., Norman, B., & Hamin, E. (2016). Population Growth and Change in Non-Metropolitan Coastal Australia. Parallel Patterns of Shrinking Cities and Urban Growth: Spatial Planning for Sustainable Development of City Regions and Rural Areas, 165.

Hartigan, L., & Morley, J. (2018).A Factor Model Analysis of the Effects of Inflation Targeting on the Australian Economy.

Heeringa, S. G., West, B. T., & Berglund, P. A. (2017).Applied survey data analysis.Chapman and Hall/CRC.

Huang, Q., & Gamble, J. (2015). Social expectations, gender and job satisfaction: Front?line employees in C hina's retail sector. Human Resource Management Journal, 25(3), 331-347.

McGuinness, S., & Ortiz, L. (2016). Skill gaps in the workplace: measurement, determinants and impacts. Industrial relations journal, 47(3), 253-278.

Nath, H. K., &Sarkar, J. (2018). Inflation and relative price variability: new evidence from survey-based measures of inflation expectations in Australia. Empirical Economics, 1-24.

Nguyen, H. T., & Duncan, A. S. (2017). Exchange rate fluctuations and immigrants' labour market outcomes: New evidence from Australian household panel data. Journal of International Economics, 105, 174-186.

Oliver, D., & Yu, S. (2018). The Australian labour market in 2017. Journal of Industrial Relations, 60(3), 298-316.

Pandya, V., &Sisombat, S. (2017). Impacts of Foreign Direct Investment on Economic Growth: Empirical Evidence from Australian Economy. International Journal of Economics and Finance, 9(5), 121.

Próchniak, M. (2018). The impact of product market competition on GDP per capita growth in the EU countries: does the model of capitalism matter?. Post-Communist Economies, 30(2), 131-155.

Rautiainen, A., Sippola, K., &Mättö, T. (2017). Perspectives on relevance: The relevance test in the constructive research approach. Management Accounting Research, 34, 19-29.

Robinson, T., Nguyen, V. H., & Wang, J. (2017). The Australian economy in 2016–17: Looking beyond the apartment construction boom. Australian Economic Review, 50(1), 5-20.

Roobavannan, M., Kandasamy, J., Pande, S., Vigneswaran, S., &Sivapalan, M. (2017). Allocating environmental water and impact on basin unemployment: Role of a diversified economy. Ecological Economics, 136, 178-188.

Ross, M. W., Iguchi, M. Y., &Panicker, S. (2018). Ethical aspects of data sharing and research participant protections.American Psychologist, 73(2), 138.

Schofield, D., Cunich, M., Shrestha, R. N., Tanton, R., Veerman, L., Kelly, S., &Passey, M. E. (2018). The long-term economic impacts of arthritis through lost productive life years: results from an Australian microsimulation model. BMC public health, 18(1), 654.

Walliman, N. (2017). Research methods: The basics. Routledge.

Yin, R. K. (2017).Case study research and applications: Design and methods. Sage publications.

Online

Australia Economy - overview - Economy. (2018). Retrieved from <https://www.indexmundi.com/australia/economy_overview.html>[Accessed on 24 September 2018]

Labor force, Australia, 2018, [Accessed through] < https://www.abs.gov.au/ausstats/[email protected]/mf/6202.0> [Accessed on 23 September 2018]

Retail inflation in Australia, (2018). Retrieved from <https://www.rba.gov.au/publications/bulletin/2016/jun/2.html>[Accessed on 24 September 2018]

Unemployment and retail industry of Australia. (2018). Retrieved from <https://www.nra.net.au/youth-unemployment-retail-industry/>[Accessed on 24 September 2018]