Retailers welcome Rudd's early Christmas present

Peak retail industry body the Australian Retailers Association (ARA) has supported the Rudd Government's announcement of its $10.4 billion Economic Security Strategy including handouts and tax rebates for pensioners and other consumers to boost Christmas spend.

ARA Executive Director Richard Evans said after successive months of stagnant and declining growth, Australia's retail sector welcomes any stimulus boosting consumer confidence for a successful Christmas trading season.

"Retailers applaud any move to reinvigorate consumer sentiment and start the upwards trend for consumer spending in time for the 2008 Christmas season. Prime Minister Rudd's plans for a Christmas bonus is great news for consumers who look forward to enjoying the gift giving tradition of Christmas - and even better news for retailers hard hit by months of reduced consumer demand.

"At the moment it is quite difficult to make projections for retail trade this Christmas. The retail sales cycle peaked last Christmas with a year-on-year growth of around 7. 6 percent but, up until last week, we were expecting this to drop to a year-on-year growth of 4.5 percent. This equates to retail sales of approximately $36.9 billion up from the $35.4 billion projected for last year.

"However last week's interest rate cut of one percentage point and now Prime Minister Kevin Rudd's plans to give consumers an early Christmas present means we will have to re-evaluate these figures. Hopefully, Christmas predictions will be clearer in the next couple of weeks.

"Without relying on credit and with some responsible spending, Australian consumers should feel confident to enjoy the upcoming Christmas season. In particular, consumers are expected to make a return to using lay-by for things like bicycles and other children's Christmas presents that they will pay off over eight to 12 weeks," Evans said.

"The ARA has said all along that the rate increases in November 2007 were yet to be felt through the economy when the premature and damaging February and March 2008 rate increases were announced - unfortunately our predictions were correct. But the recent RBA decision to cut interest rates tells us the underlying foundations of our economy are strong and consumers should be confident to spend responsibly and enjoy Christmas 2008.

"If consumers stop spending, jobs are at threat. The Economic Security Strategy is great news from the Rudd Government just in time for Christmas," 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.

For interview opportunities with ARA Executive Director Richard Evans contact:
Kath Christie, ARA Policy & Media T: 0422 293 544 E: kath.christie@retail.org.au