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CPI shows supply-channel driven inflation - Retailers call for consumers to start spending again

Peak retail industry body the Australian Retailers Association (ARA) said the ABS Consumer Price Index (CPI) figures released today indicate inflation over the past year has been driven by increases in supply-channel costs.

ARA Executive Director Richard Evans said the CPI annual rise of 5.0% through the year to September quarter 2008 must be looked at in the context of supply-channel driven inflation.

"Inflation this year is not about consumer demand. Increases in the supply channel costs have been driving price increases. The past interest rate rises imposed by the RBA have wilted consumer sentiment to the lowest since 1992 and this has had a negative impact on retailers.  

 "Prices are not the issue at the moment, it's consumers not spending that is the problem. When the retail sector is suffering, business will dry up right through the supply channel and this means the entire economy will start to be affected.

"What we need now is a boost to consumer confidence because if consumers stop spending jobs will be lost.

"There are extended sales now so consumers have a great opportunity to take advantage of some really good deals.

"With Christmas just around the corner and the Rudd Government offering some relief with the recent stimulus package, now is the time for consumers to feel confident to spend responsibly and inject dollars back into the economy to flow right through the supply-chain," Evans said.

For over 104 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.2 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit www.retail.org.au or call 1300 368 041.

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