Specialist Audio Channel In Crisis As Credit Card Rates Soar & Dollar Falls
The specialist audio channel is in crisis according to distributors that ChannelNews has spoken to with the fall in the Australian dollar set to push up prices a move that could impact retailers in the New Year.
Several distributors have said that more than six key retail stores in NSW and Victoria have been put on credit hold during the past 3 months and that others are “maxing out” credit cards because of a lack of access to credit.
As a result of the difficulties in the retail channel, distributors have moved to expanding their commercial and Pro AV offerings in an effort to avoid the problems that are emerging in the specialist retail channel.
Several retailers who cannot get B2B credit from banks have moved to apply for multiple credit cards despite credit card interest rates hitting close to 20%. Retailers are also using their homes as security or are applying for home mortgages in an effort to get access to cheaper credit.
This year small business lending rates have barely fallen and those for credit cards have increased in the wake of three cuts in the official interest rate by the Reserve Bank.
As the big four banks endure a political backlash for not fully passing on the RBA’s latest cut for mortgage holders, analysis of the RBA’s database reveals the average interest rate on small business loans has fallen 0.23 percentage points to 7.07 per cent between May and the end of September while mortgage rates are at around 3.75%.
Credit card interest rates have increased 0.08 percentage points to 19.94 per cent over a period in which the big four have cut their standard variable mortgage rates by an average of 0.57 per cent.
According to several brands the cost of goods will rise in the New Year following a significant fall in the Australian dollar which was hovering around $0.66 to $0.67 to the US dollar yesterday.
Michael Jackson the CEO of buying group NARTA said that some brands had already moved to increase prices in the mass CE and appliance channel, but he doubts that the recent fall in the dollar will impact new stock currently coming into the Channel for the peak holiday buying period.
“What we will possibly see is the price of goods going up in the new year as brands move to pass on the impact of the fall in the dollar”.