“Rocky Road Ahead For Retail”: ARA
The CEO of the Australian Retail Association has warned the that record spending we are seeing isn’t a reflection of true retail performance.
Paul Zahra notes the impacts of rising inflation, staff shortages, interest rate hikes, ongoing supply chain issues and dwindling confidence on the retail sector, pointing out there has been no let up since the pandemic hit, and the Ukraine war has only intensified this.
For five consecutive months, spending has been at record levels, but these figures are skewed.
“It’s unlikely we’ll see retail spending maintain these levels as the rising cost of living begins to take hold on family budgets,” explains Zahra, noting that “when we rein in our spending, some of the first things we cut are discretionary purchases.”
Zahra believes that the $256 billion worth of savings Australians are sitting on is cushioning some of the blow at the moment, but notes these are starting to erode.
“Retailers are resilient but there’s no doubt the road ahead is a rocky one,” he said.
“We have a new government with a golden opportunity to embrace some fresh policies, to not only get us through this challenging economic period, but to set us up for a new era of prosperity.”