A new survey from the Australian Retailers Association shows the confidence of retailers is falling, they are having difficulty keeping staff, and their support for the Rudd Government is falling fast.
The ARA’s inaugural Retailers’ Index report shows that retailers have experienced “a sharp fall in confidence in the past quarter, recording much lower confidence than for businesses in general”.
The index is calculated by analysing the Sensis Business Index and comparing them against the results of retail SMEs and SMEs in other areas, and shows that confidence in retailers dropped 7% in the last quarter, down 48% from the same time last year.
“The main reasons for retailers expressing lower confidence were people not spending, rising interest rates and decreasing demand across the economy,” the report says.
Additionally, the report finds the retail sector wage bill increased 11%, which is higher than other SMEs, but 14% of retailers report difficulty in keeping staff as employment rates drop.
ARA executive director Richard Evans says the lack of confidence comes from the current economic climate, which 19% of retailers point to as a problem.
“Cash registers are starting to become silent. Therefore, now retailers have to reduce costs… they’re struggling with their business models to try and overcome expenses and still maintain competitiveness.”
Evans says retailers have to change the way their business is run in order to stay afloat. “They have to review their expenses to remain competitive,” he says. “They have to dramatically review the business model, and reduce expenses as best as they can.”
The index also reports the amount of support for Government policy has dropped 4%, with the main reasons being lack of incentives for small businesses and fears return of unfair dismissal laws would negatively affect retailers.
“Retailers want to blame someone, and they’re blaming the Government,” Evans says. “That’s a little premature… what they need to be doing is looking at their business model.”
Read more about the retail sector