Retailers stuck in low gear

AUGUST 2010

DISMAL retail conditions in the past quarter shows small retailer confidence plunging 29 points to negative five per cent - the lowest result for any industry sector.

The Australian Retailers Index has shown a sharp decline in March, April and May exacerbated by the flow on impacts of two-speed economic conditions.

Australian Retailers Association executive director Russell Zimmerman, says the sharp fall and conservative consumer behaviour is proof that retailers are struggling.

“The results of the June ARA Australian Retailers Index clearly show retailers are stuck in the low gear of the two-speed economy,” he says.

“The most common concern for Australian retailers in the past quarter was the lack of sales or work – a sharp increase of 14 points from the previous quarter to 27 per cent. Other major concerns for the sector included the economic climate (24 per cent), followed by cash flow (12 per cent).”

Zimmerman says the index confirms recent reports that consumers are pulling back and not spending. With retail sales performance listed as the lowest among the industry sector, down 23 points to negative 34 per cent, profitability also dropped 16 points to negative 33 per cent.

“Amid the environment of poor trade in the past quarter, there was a feeling that government policies favoured larger businesses and worked against the small business sector,” he says.

“Looking forward, employment expectations for the current quarter also fell to disappointing levels at negative nine percent. The upcoming September ARA Australian Retailers Index will show an actual reflection of the new award’s impact on employment in the sector as small retailers struggle to manage increase wage bills.”

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