Retail “Very Weak”, No Change Forecast: Economist
Traditional store sales are “very weak” at the moment, growing at about 2% per annum to May 2013, Alan Oster, Nab chief Economist told CN.
“I suspect that’s not going to change anytime soon,” he warned, which is a depressing prospect for retailers looking to fight online competition and price deflation.
Consumers are deleveraging and saving their pennies, says Oster.
NAB Online Sales Index released yesterday, showed web sales also slowed to 14% growth yoy in June – valued at $13.9 billion.
Internet purchases were equivalent to 6.2% of the traditional bricks & mortar retail sales in the year to May.
Official June retail figures are out next week.
The Australian Retailers Association today called on the Reserve Bank to cut interest rates to at least 2.5 percent when it meets next Tuesday.
“”While the RBA lowered rates in May, this small cut was simply not enough to help retailers who need relief from consumers’ reluctance to spend,” said ARA Executive Director Russell Zimmerman.
He also said retailers who are struggling to “keep their heads above water” on the back of recent increases in minimum wage, Medicare levy, continually weak trade figures, higher operational costs and penalty rate rises.