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Small retailers give Rudd 'tough love' - September ARA Australian Retailers' Index released today

New research released today in the September ARA Australian Retailers' Index revealed retail support for the Federal Government has remained low during the past quarter despite rising 10 points to a negative 22 percent approval rating.

ARA Executive Director Richard Evans said the Index revealed there was still the notion among 33 percent of retailers that the Federal Government's policies worked against them.

"The September ARA Australian Retailers' Index shows small business legislators that reducing red tape is the number one priority for retailers, with those unsupportive of Federal Government policies blaming too much paper work and administration. On the other hand, those retailers who are supportive of Government policies (11 percent) believe they have tried hard to reduce red tape.

"Other key reasons Australian retailers believed the Federal Government's policies worked against them were: a feeling that increases in the petrol price had impacted consumer spending and that the Government didn't offer incentives to small business," Evans said.

"Although confidence in Government policies has risen slightly, it seems retailers' expectations are a little ahead of reality with sales performance falling 15 percent in the past quarter and 52 percent of retailers experiencing a decrease in sales, despite only 29 percent of them saying they expected a decrease in sales in the previous quarter.

"We see the same trend with profitability. When retailers were asked about their expectations for the past quarter, 31 percent of retailers indicated they expected to increase their profits. In fact, only 18 percent increased profits while 53 percent of retailers experienced a decrease in profitability. This is a drop of 20 percentage points from the previous quarter's results," Evans said.

"This is a clear warning for small retailers to err on the side of caution and be conservative in their planning - even if they are slowly gaining confidence with the Government.

"What the retail market needs is consumer confidence and this requires government narrative to become more supportive. Now is not the time for politics, rather we need positive government news. Retailers are warming to Prime Minister Rudd but it's 'tough love'," Evans said.

The Australian Retailers' Index analyses the Sensis® Business Index results for businesses in the retail sector, providing a snap shot of the retail sector every quarter in the following categories: Retailer confidence; retailer concerns; sales, profitability and employment; capital expenditure; wages and prices and assessment of Federal Government policies. The results of the ARA Australian Retailers' Index assist the ARA to maintain strong links with government and influence and direct policy that may affect the retail industry.

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

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