It appears the first Government stimulus package and interest rate cuts have achieved their purpose and salvaged 2008 for the retail sector, with spending in December up $1 billion compared to December 2007.
This represents a 3.8 per cent rise for the month, and according to ANRA CEO Margy Osmond, it was the biggest monthly increase since the GST was introduced.
“Over two thirds of all the growth in retail spending in 2008 came in December, up until then we were still scanning the horizon for any growth in terms of retail turnover,” said Osmond.
“The cash bonus allowed the retail sector to finish the year on a much more positive note than would have been the case.”
The category which showed the highest growth over the period were household goods, which experienced a growth of $292 million (9.9 per cent) in December, department stores in general witnessed a lift of $123 million (8.3 per cent).
Overall for the entire year, sales were up 4.1 per cent from 2007, but after adjusting for inflation it rests at about 1.6 per cent.
“What needs to be remembered is that 2008 was an ordinary year, compared to what was going to be a dreadful year before the government intervened,” commented Osmond.
With the possibilities of a second stimulus package on the horizon, Osmond feels that might encourage more people to spend.
“The prospect of further cash payments and interest rate cuts may encourage people who did not spend their first handout, to perhaps think about spending it now.”