And benefits to retail trade.
Retailers have mixed views on whether recent interest rate and personal tax cuts will boost consumer spending.
Winning Group CEO, John Winning said any increase to retail trade would depend on how much debt individual customers have taken on and what their spending priorities are. “If the tax cuts stimulate any retail spending then it’s going to be better for us, however I certainly wouldn’t be banking on it,” he told Appliance Retailer.
“We are experiencing strong double digit growth for the group and recently broke records for the most deliveries in a single day in NSW, Queensland, Victoria, South Australia and Western Australia and we also broke our national NPS record for deliveries, which was 84.9 for the month of June.”
He said cooking and refrigeration are achieving good sales.“Premium laundry is also performing well, as consumers are increasingly making laundry appliances a more considered purchase.The renovation market continues to be strong, with the average order size increasing.”
BSR Group CEO, Graeme Cunningham said tax cuts, along with the drop in interest rates, should boost consumer confidence and flow through to retail spending. He said while sales are consistent across most categories the group is continuing to see strong sales of large screen TVs.
“There are challenges and the housing market is one because it is such an important part of the local economy and our industry is certainly affected by any downturn. However, we expect the recent announcements on interest rates will improve second half activity,” he told AR.
“Our online business continues to do well with growth in all metrics. We are seeing the benefits of online translated into positive store results.”
Rawsons sales director, Jon Psying told AR he believes most consumers will hold onto the extra cash for a rainy day or spend it on smaller one offs. “For us it should see increased sales of our Weber BBQ range which has price points below $1000. There is a lot of brand trust around at this time because consumers are looking for long term value.”
He said while Q1 sales were slow, April, May and June gathered steam with some solid trading particularly for cooking and alfresco products. Online sales continue to erode margins, he said. “Not by the feared Amazon but local businesses that are not only affecting retail will be detrimental to long term supplier/retailer relationships.
“We expect the upcoming launch of Miele 7000 series cooking appliances will produce strong runout deals because a Miele changeover always stimulates appliance spending.”
Australian Retailers Association executive director, Russell Zimmerman said: “Absolutely the cuts will boost retail and I don’t expect electrical retail business will be left out, but generally I think the money will be broadly spent.”
He said recent wage increases, interest rate reductions and going into summer will all translate into a stronger Q2. “Electrical retail has had a couple of slow trading months, with April in negative territory and May was not much better, but I think there will be an uptick now which will bring confidence back into the market,” he told AR.
“The challenge for most retailers as I see it is around artificial intelligence and how to use it.” He said consumers need to spend money with retailers based in Australia and support business with a strong presence here which would help to boost the economy.
The National Retail Association has also welcomed the passage of the $158 billion, five-year tax package, urging Australians to spend their tax relief in the stores.
CEO Dominique Lamb said that it was great news for struggling retailers across the country and the best present retailers could have asked for to kick off the new financial year. “Although these tax cuts are no silver bullet, they certainly put money straight into the back pocket of millions of Australians and should result in a much-needed boost in retail spending.”