by Chris Becker
Is this the start of a consumer confidence campaign or just a general whinge? From the SMH:
A balmy winter across the eastern capitals and a tough federal budget are playing havoc with retailers, leaving them stuck with unwanted winter stock and shoppers missing from the stores.
And any recovery for the industry that is worth $100 billion and employs more than 450,000 people, might not appear until later in the year as weather patterns return to normal and the uncertainty around how a new Senate will treat Treasurer Joe Hockey’s budget measures becomes clearer.
Consumers could be the winners, as insiders predict massive discount sales after July as retailers burdened with unwanted stock start slashing prices to clear the way for next season’s range.
Seems like the press releases are coming out thick and fast as some of the peripheral retailers – as detailed yesterday – announce profit cuts and downgrades, nominally blamed on weather and the Budget. But is the reality a bit further below the surface of these easy to attach complaints?
More fuzz:
On Tuesday, National Retailers Association chief Margy Osmond said the sector was doing it tough.
”We have been out there quite publicly saying that the warm weather will have had had an impact, especially in the discretionary spend and in the fashion environment,” Ms Osmond said. ”But from the point of view of the big discretionary spend retailers, they have got a store full of winter clothes that nobody has wanted to buy up until the last week or so.”
It seems the lack of confidence is only limited to the consumer sector, as NABs business confidence/condition survey published yesterday takes some wind out of this “poor weather” sail:
However, underlying conditions are not as robust, as it seems only service based industries have seen any improvement. Coupled with a very poor job ads survey, released on Tuesday, maybe there is more to this than just some general industry whinging for more stimulus/confidence.
Of all parts of the economy, the consumer sector relies more upon confidence than any other. The stalling share price (not withstanding the cratering performance of the likes of Pacific Brands, The Reject Shop et al) in recent weeks – without further rate cuts from the RBA – maybe telling a wider story:
A clearer picture should emerge this morning when Westpac releases its closely watched consumer confidence survey for June.