Retailers excited by “early Christmas present”
Peak retail industry body the Australian Retailers Association (ARA) has supported the Rudd Government’s announcement of its $10.4 billion Economic Security Strategy including handouts and tax rebates for pensioners and other consumers to boost Christmas spend.ARA Executive Director Richard Evans said after successive months of stagnant and declining growth, Australia’s retail sector would welcome any stimulus boosting consumer confidence for a successful Christmas trading season. “Retailers applaud any move to reinvigorate consumer sentiment and start the upwards trend for consumer spending in time for the 2008 Christmas season,” he suggested.
“At the moment it is quite difficult to make projections for retail trade this Christmas. The retail sales cycle peaked last Christmas with a year-on-year growth of around 7. 6 per cent but, up until last week, we were expecting this to drop to a year-on-year growth of 4.5 per cent. This equates to retail sales of approximately $36.9 billion up from the $35.4 billion projected for last year.”
“However last week’s interest rate cut of one percentage point and now Prime Minister Kevin Rudd’s plans to give consumers an early Christmas present means we will have to re-evaluate these figures,” Mr Evans said. “Hopefully, Christmas predictions will be clearer in the next couple of weeks.”
“The ARA has said all along that the rate increases in November 2007 were yet to be felt through the economy when the premature and damaging February and March 2008 rate increases were announced – unfortunately our predictions were correct. But the recent RBA decision to cut interest rates tells us the underlying foundations of our economy are strong and consumers should be confident to spend responsibly and enjoy Christmas 2008.”
“If consumers stop spending, jobs are at threat. The Economic Security Strategy is great news from the Rudd Government just in time for Christmas,” Mr Evans concluded.