If you are going to open a franchise, or you are the franchisor of a big network of stores, and the Board expect the number of outlets to increase – how do you decide where to look? The answer is to look at the numbers!
How often do we make a decision because it feels right? In most cases you are probably proven correct, however if it does not come off, do you feel a bit of a goose?
Australia has a wealth of information to help you make the correct decisions. We had a Census in 2021 which was released in 2022, and this, and the Australian Bureau of Statistics give you excellent information you can rely on.
The census tells us how Australia is as of a certain date – think of it like a Balance Sheet. On the 10th August 2021 – we had a population of x, average income of y and z% of us was born overseas. We can even compare this with the 2011 and 2016 Census if we want, and see what has happened IN THE PAST!
In financial speak, the difference between 2 Balance Sheets is a Profit and Loss, or what has happened in between (the changes). However most of us do not want to look backwards – we want to know what is going to happen in the future.
Growth forecasting
There are a couple of ways to look at forecast growth, such as extrapolating between 2 past points in time, and take the change and move it forwards. However our friends at the ABS do it far better than just that.
In October 2019, the ABS released their forecasts for 2017 – 2032 for population projections by gender and by 5 year age groups for the Department of Health. This data is the gold level data for consistently looking at future population growth, having taken in contributions from States, Councils and Federal policy settings to come up with the best available projections at that time.
While Covid has had some effect on this, stable areas will remain stable, while growth areas will continue to grow, and there is some regional areas that will exceed original expectations for the next few years I expect.
According to our Treasurer The Hon Jim Chalmers MP, and the 6th Intergenerational Report released in 2023, Australia’s population is expected to reach 40.5 million in 2062-63. We can see the small “speed bump” due to Covid 19 however the long term effect can be altered by Commonwealth migration policy.
The different lines on the graph show the projections at various times over previous Intergenerational Reports (IGR)
Source – 6th Intergenerational Report
Not only can we see forecast Total Population growth, we can see it by certain age groups, and this needs to be taken into account in what you are trying to sell. The chart below called a Tornado diagram which shows what % of the population falls into what age group, starting in 1982, then 2022 and finally the expected for 2062.
Over time we can see a huge aging of the population especially when looking at the older population, especially the group 85+.
Age structures, 1982–83, 2022–23 and 2062–63
Source – 6th Intergenerational Report
If we look at an area like Wyndham in Melbourne or Bringelly in Sydney, the numbers are expected to sky rocket. Basically whether you are selling mortgages, school uniforms or many other services for young families – it should be strong.
- SA3 Area: Wyndham
- Total Population Projected (2017) : 246,455
- Total Population Projected (2022) : 314,957
- Total Population Projected (2027) : 381,003
- Total Population Projected (2032) : 444,605
- Total Population Change 2017-2032 proj. (pct): 80 %
- Total Population Change 2017-2032 proj. : 198,150 persons
Imagine selling children’s shoes and offering child minding services in this area:
- SA3 Area : Wyndham
- Age 5-19 Projected (2017) : 51,164
- Age 5-19 Projected (2022) : 69,551
- Age 5-19 Projected (2027) : 86,664
- Age 5-19 Projected (2032) : 102,560
- Age 5-19 Change 2017-2032 proj. (pct): 100 %
- Age 5-19 Change 2017-2032 proj. : 51,396 persons
The highest growth statistical area 3’s (SA3) across Australia can be summarised as:
By # Change (> 50,000)
| SA3 Name | State | Population Projection 2017 | Population Projection 2032 | # Change |
| Wyndham | Vic | 246,455 | 444,605 | 198,150 |
| Whittlesea – Wallan | Vic | 233,187 | 398,667 | 165,480 |
| Casey – South | Vic | 187,712 | 332,759 | 145,047 |
| Tullamarine – Broadmeadows | Vic | 176,098 | 288,017 | 111,919 |
| Melton – Bacchus Marsh | Vic | 167,750 | 279,517 | 111,767 |
| Bringelly – Green Valley | NSW | 112,509 | 220,155 | 107,646 |
| Wanneroo | WA | 199,048 | 306,204 | 107,156 |
| Sydney Inner City | NSW | 239,553 | 339,883 | 100,330 |
| Blacktown – North | NSW | 100,976 | 193,164 | 92,188 |
| Melbourne City | Vic | 159,050 | 249,405 | 90,355 |
| Ormeau – Oxenford | Qld | 132,732 | 216,042 | 83,310 |
| Cardinia | Vic | 102,704 | 176,923 | 74,219 |
| Campbelltown (NSW) | NSW | 166,032 | 235,193 | 69,161 |
| Swan | WA | 136,038 | 204,883 | 68,845 |
| Springfield – Redbank | Qld | 90,932 | 156,805 | 65,873 |
| Dandenong | Vic | 200,015 | 256,606 | 56,591 |
| Auburn | NSW | 97,821 | 152,752 | 54,931 |
| Parramatta | NSW | 150,866 | 202,796 | 51,930 |
Source: Customised projections prepared for the Australian Government Department of Health by the Australian Bureau of Statistics (2017-2032)
By % Change (> 60%)
| SA3 Name | State | Population Projection 2017 | Population Projection 2032 | % Change |
| Molonglo | ACT | 5,715 | 20,782 | 263.6% |
| Serpentine – Jarrahdale | WA | 29,566 | 63,757 | 115.6% |
| Bringelly – Green Valley | NSW | 112,509 | 220,155 | 95.7% |
| Blacktown – North | NSW | 100,976 | 193,164 | 91.3% |
| Rouse Hill – McGraths Hill | NSW | 36,218 | 69,055 | 90.7% |
| Jimboomba | Qld | 49,760 | 94,077 | 89.1% |
| Kwinana | WA | 41,866 | 75,611 | 80.6% |
| Wyndham | Vic | 246,455 | 444,605 | 80.4% |
| Casey – South | Vic | 187,712 | 332,759 | 77.3% |
| Wollondilly | NSW | 43,285 | 76,221 | 76.1% |
| Springfield – Redbank | Qld | 90,932 | 156,805 | 72.4% |
| Cardinia | Vic | 102,704 | 176,923 | 72.3% |
| Whittlesea – Wallan | Vic | 233,187 | 398,667 | 71.0% |
| Melton – Bacchus Marsh | Vic | 167,750 | 279,517 | 66.6% |
| Tullamarine – Broadmeadows | Vic | 176,098 | 288,017 | 63.6% |
| Ormeau – Oxenford | Qld | 132,732 | 216,042 | 62.8% |
| Palmerston | NT | 36,888 | 59,864 | 62.3% |
Source: Customised projections prepared for the Australian Government Department of Health by the Australian Bureau of Statistics (2017-2032)
By contrast Port Stephens in NSW is still growing, but it is becoming a retirement centre:
- SA3 Area: Port Stephens
- Total Population Projected (2017) : 73,520
- Total Population Projected (2022) : 76,812
- Total Population Projected (2027) : 79,578
- Total Population Projected (2032) : 81,638
- Total Population Change 2017-2032 proj. (pct): 11 %
- Total Population Change 2017-2032 proj. : 8,118 persons
Whilst the population is expected to grow 11% or 8,118 people, what would happen if you are trying to sell school uniforms there?
- Age 5-19 Projected (2017) : 13,522
- Age 5-19 Projected (2022) : 13,487
- Age 5-19 Projected (2027) : 13,397
- Age 5-19 Projected (2032) : 13,203
- Age 5-19 Change 2017-2032 proj. (pct): -2 %
- Age 5-19 Change 2017-2032 proj. : -319 persons
The projected number of school age children is expected to drop by 2% or 319 children over the same 15 year period.
What does a high growth area look like?
If I had to summarise a high growth areas almost anywhere in Australia I would expect:
- High % of young families
- High levels of ethnicity as many immigrants are very keen to purchase a house at their earliest convenience, and often with their community who are in a similar situation
- Most families have a mortgage and in many cases both parents working
- A high demand for child care
- Low levels of socio economics, normally what we expect with young families trying to purchase a house
- Older cars – often needing work to remain on the roads
- Smallish modern houses, in fairly tight living (small blocks of land)
- A high % of multigenerational families – often up to 3 or even 4 generations
We need to think of this as opportunity for certain products and services, and try and bring them into the areas.
Summary
Demographics and population forecasting can tell us a great deal about an area, and help guide us in our decision making. I suggest you think for the long term (10 – 15 years), and if what you are planning to sell matches in with the current market available, and how will it go in 10 – 15 years’ time?
If you are a potential franchisee, this can assist you in deciding the right type of business for your area given most people consider areas close to home when they buy a franchise, and most customers purchase near where they live. If you are considering a sea/tree change, similar population forecast information can be discovered for any region around Australia.
If you plan joining a mature network of stores (eg McDonalds, KFC, Ampol or 7Eleven), or you want to open a service franchise across Australia (Jim’s Everything), one of the best ways to expand is to be aware of the high growth corridors, and make sure you are ready to open when the time is correct.
Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, the leading Geodemographic and Sales Prediction Modelling Company in Australia. He is a CFE and also a Director and past Vic / Tas President of the Institute of Management Consultants. Peter is contactable by email at:
peterb@spectrumanalysis.com.au or visit www.spectrumanalysis.com.au.