Retail trade figures for the September quarter released yesterday showed retail sales were basically flat signalling more interest rate cuts might be underway to boost consumer confidence in time for the Christmas season.
Retail sales rose by just 0.1 per cent in the September quarter, which according to Australian National Retailers Association (ANRA) chief executive Margy Osmond is a very disappointing result and does not bode well for the national economy in 2009.
“The retail sector needs a circuit-breaker – and Christmas is the best opportunity,” she said.
“After two quarters of falling sales, retailers had hoped to see the first signs of a recovery in the September quarter figures.
“The June quarter was a grim time for retailers. Consumer spending fell for the first time since 1993. Consumer confidence fell to levels not seen since the recession of the early 1990s. But, it was hoped, the sector had hit bottom. The September retail figures show no signs of an imminent recovery.”
In June, consumers were hit hard by rising fuel prices and interest rates. Now consumer confidence is being battered by fears of rising unemployment and economic slowdown, said Osmond.
“A great concern is the fact that our largest state is in a retail recession – New South Wales has recorded two consecutive quarters of negative growth (following no growth in the March 2008 quarter).”
The ACT is performing poorly as well with a three per cent decrease in sales, however, the rest of Australia showed positive numbers with South Australia, Western Australia and Tasmania continuing to sustain solid growth. Sales in Victoria and Queensland were respectable but trending downwards.
“The consolation for retailers today is that we are yet to see the impact on consumer spending of the last two interest rate cuts. It remains to be seen whether consumer sentiment will become more positive following the 1.75 per cent rate cut and the announcement of the government’s stimulus package,” said Osmond.