According to two of the leading retail industry groups the ANRA and the ARA, Australian consumers are starting to regain their confidence in the economy and retailers are starting to see small improvements.
The Australian National Retailers Association chief executive, Margy Osmond, commented that the ABS announcement of a 2.2 per cent increase in sales for March has helped regain the losses experienced in previous months.
“The two rounds of cash bonuses have provided a much needed injection into the cash registers around the country. Access Economics estimates that the stimulus effect was $616 million in March,” she said.
Osmond also mentioned that department stores were the biggest winners for the period, up 13.2 per cent.
“The department stores have captured a fair portion of the second cash bonus after some very aggressive marketing targeted at households.”
The Australian Retailers Association executive director, Richard Evans, was also happy with the result but was adamant that the second round of stimulus handouts was not a factor in this growth.
“The March growth was not a result of the recent Household Stimulus Package. Economic stimuli, including interest rate cuts and the Government’s stimulus funds, don’t impact the retail sector overnight – that is not the way the market works,” he said.
“ARA modelling indicates any change in interest rates or other economic stimuli takes between three and six months to affect the market.”
In other related news the ANRA has also released the details of its latest consumer spending survey, which highlighted that one in two Australians are planning to save the second cash handout.
In addition 31 per cent of respondents said they will pay down debt with the money, 22 per cent will spend it on non-essential items, 21 per cent will spend on general living expenses and 8 per cent will go on holiday.
“ANRA’s surveys show that Australians were realistic about the economy when the cash bonuses first began hitting bank accounts and that view hasn’t changed,” said Osmond. “People were cautious from the outset and they’ve stuck with that conservatism.”
For the people that did use their money to buy non-essential items the most popular included: clothing and shoes (29%); TVs, computers and iPods (20%); home renovations and supplies (14%); and furniture and whitegoods (both 10%).