FED:Retailers wary despite growth

AAP General News (Australia)
08-31-2010
FED:Retailers wary despite growth

SYDNEY, Aug 31 AAP - Retailers aren't out of the woods yet despite figures showing
a bigger than expected rise in July growth, say peak industry bodies.

Figures from the Australian Bureau of Statistics (ABS), released on Tuesday, show consumers
spent a record $20.4 billion in July, nearly double the growth economists had predicted.

Margy Osmond, CEO of the Australian National Retailers Association (ANRA), on Tuesday
welcomed the 0.7 per cent rise in monthly retail growth.

But the retail sector overall was still struggling to find its feet following the global
financial crisis, she warned.

Ms Osborne said that without the significant boost to cafe, restaurant and takeaway
services - the strongest across the board at 5.3 per cent - retail growth would have been
a meagre 0.04 per cent.

"Consumers are still choosing to put money aside for a rainy day rather than taking
it down to the shops for some retail therapy," Ms Osmond said in a statement.

"Retailers have been discounting significantly and, as we begin to prepare for Christmas,
the sector is not ready to break out the champagne in celebration quite yet."

The Australian Retailers Association (ARA) said that a rise in hospitality trade should
not detract from the overall reality.

"Eating out seems to be a small luxury consumers are happy to treat themselves," said
Russell Zimmerman, executive director of the ARA.

"We're still getting emails every day from retailers across the country saying this
is one of the worst years of trade they can remember."

Figures from ARA's internal surveying also showed that three quarters of consumers
planned on drastically cutting spending in the next 12 months, posing a serious threat
to the more than 1.2 million jobs the retail sector supports.

"If business doesn't start to improve across all retail categories, small retailers
who are already struggling to manage increased wage bills will have to start letting go
of staff," Mr Zimmerman said.

Both Ms Osmond and Mr Zimmerman agreed that now was not the time for the Reserve Bank
of Australia to consider increasing interest rates.

AAP nep/tr/cdh

KEYWORD: RETAILERS ARA

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