Small retailers slow to warm to Federal Government as sales take a hit

Posted by James Ferre on 18th September 2008

New research released today in the September ARA Australian Retailers’ Index* revealed retail support for the Federal Government has remained low during the past quarter, despite rising 10 points to a negative 22 per cent approval rating.ARA Executive Director Richard Evans said the Index revealed there was still the notion among 33 per cent of retailers that the Federal Government’s policies worked against them. “The September ARA Australian Retailers’ Index shows small business legislators that reducing red tape is the number one priority for retailers, with those unsupportive of Federal Government policies blaming too much paper work and administration,” he commented. “Other key reasons Australian retailers believed the Federal Government’s policies worked against them were: a feeling that increases in the petrol price had impacted consumer spending and that the Government didn’t offer incentives to small business.”

Mr Evans advised that the 11 per cent who were supportive of Government policies believed that there has been an attempt to reduce red tape.

“Although confidence in Government policies has risen slightly, it seems retailers’ expectations are a little ahead of reality with sales performance falling 15 per cent in the past quarter and 52 per cent of retailers experiencing a decrease in sales, despite only 29 per cent of them saying they expected a decrease in sales in the previous quarter,” Mr Evans added.”We see the same trend with profitability. When retailers were asked about their expectations for the past quarter, 31 percent of retailers indicated they expected to increase their profits. In fact, only 18 percent increased profits while 53 percent of retailers experienced a decrease in profitability.”

Mr Evans believes the findings are a “clear warning” to small retailers to be conservative in their planning for the months ahead.

“What the retail market needs is consumer confidence and this requires government narrative to become more supportive. Now is not the time for politics, rather we need positive government news. Retailers are warming to Prime Minister Rudd but it’s ‘tough love’,” Evans concluded.

* 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. The results of the ARA Australian Retailers’ Index assist the ARA to maintain strong links with government and influence and direct policy that may affect the retail industry.