RETAIL CONFIDENCE STILL STRUGGLING

Written on the 1 April 2010

RETAIL CONFIDENCE STILL STRUGGLING

ONLY 50 per cent of SME retailers are confident about their business prospects for the year ahead, a recent Australian Retailers Association (ARA) study has shown.

The Australian Retailers Index shows a decline in confidence in the March quarter, with survey participants indicating concerns about the economic climate and consumer spend.

ARA executive director Russell Zimmerman says these results are an indication that retailers are struggling to recover from the downturn.

“The results of the March ARA Australian Retailers Index indicate there is a long way to go before retailers fully recover to ‘business as usual’ after the GFC,” he says.

“Right now small to medium retailers are telling us they’re suffering more than SMEs in any other industry.”

He says 13 per cent cited the major concern as lack of sales, 13 per cent cited lack of cash flow and 16 per cent of those surveyed reported ‘people not spending’ as a problem.

“The level of concern retailers still have about economic conditions is driven by disappointing sales and profitability.

“After an eight point drop in sales in the December quarter, retail sales performance has improved slightly in the past quarter, up two percentage points.”

But he says this was still the lowest sales result for any sector, with 40 per cent experiencing declines in profitability, compared to 23 per cent recording increases.


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