Small retailers blame Rudd Govt as confidence falls: ARA

Posted by Daniel Palmer on 17th June 2008

New research released today in the inaugural Australian Retailers Association (ARA) Australian Retailers’ Index revealed retail support for the Federal Government has dropped dramatically during the past quarter.

Approval fell 28 points to a negative 32 percent approval rating, with 42 percent of retailers believing government policies worked against small business. The figures indicate retailer confidence is clearly lower than the general SME (small & medium enterprise) population.

ARA Executive Director Richard Evans, who launched the quarterly Index today at the Retail World Management & Technology Exhibition in Sydney, suggested the sector shouldn’t be too quick to judge the new government. “The ARA Australian Retailers’ Index shows confidence amongst the retail sector has deteriorated significantly during the past quarter with a fall of seven percentage points. That’s 42 per cent lower than the same time last year,” he advised. “It is no surprise that 19 per cent of respondents are citing the current economic climate as the prime concern this quarter. People are not spending and this has retailers worried. In fact, at 12 per cent retail businesses were the most likely of any industry sector to report problems in this area.”

Evans added that rising interest rates was another economic climate issue concerning seven percent of retailers, while skills shortages and fuel costs were further worries. “There is a lot of concern about a range of issues including lack of work / sales and keeping staff (both 14 per cent) followed by cash flow and fuel costs (both 12 percent). There is pressure coming from all angles,” Evans said.

The value of sales suggests that concerns of retailers may be warranted as the number who had experienced sales decreases increased from 33% in May ’07 to 44% in May ’08. Expectations of decreases are also on the up with 29% of those surveyed expecting a decline in sales as opposed to 14% last year. The number of retailers extremely or fairly confident has witnessed a similar decline; from 67% in May ’07 to 47% in May ’08.

The Australian Retailers’ Index analyses the Sensis Business Index results for businesses in the retail sector, providing a snap shot of the retail sector every quarter in the following categories: Retailer confidence; retailer concerns; sales, profitability and employment; capital expenditure; wages and prices and assessment of Federal Government policies.