Baby boomers 'may be to blame' for retail bubble burst

The previous saving habits of baby boomers may well be responsible for the current state of the retail industry, according to a blog post by Ross Gittins, economic editor for the Sydney Morning Herald.

He says that the working generation in the 1990s began to look into the wealth creation options available to them.

A lot of baby boomers were surprised to learn that their superannuation fund - meant to last them well into their golden years - was not going to cover what Gittins calls in their "privileged lives" in retirement.

There was a sudden interest in wealth creation strategies - with inexperienced property investors perhaps attending market seminars and property management conferences.

Competition for property caused house prices to rise, which drove up potential capital gains.

This new perception of wealth meant that the baby boomers focused less on saving and more on spending - to the point where many spent more than they actively earned.

Then, when housing prices dropped, they had no savings to fall back on and had to sell their assets at reduced prices - but so did everyone else - and the market fell.

This brings us to the present day, when many homeowners have dramatically increased their saving levels, leaving less money available for retail spending.