Retail trade prospects

Melbourne’s Bourke Street mall was packed with Christmas shoppers yesterday.

That’s hardly surprising, as Australia’s pensioners have just received a $4 billion bonus from the Federal government.

But retailers have not had a good year.

With interest rates – and petrol prices – both high earlier this year – Australian shoppers simply went on strike.

That, at least, is the assessment of one of the nation’s leading forecasters, Access Economics.

And in predictions, released today, Access warns that there is worse to come.

“There is already a long-lived retail downturn,” Access says, “but it is intensifying.

“Lost confidence means that shoppers are on strike.”
Access warns, too, that retailers who specialise in discretionary items will suffer most.

Its economists note that there will be more tax cuts next year.

“But job growth will slow,” they add.

“And so will wage growth.”

“The outlook will depend considerably on developments in housing prices and unemployment,” they say.

“The first dominates consumers’ wealth.

“And the second dominates their fears,” the economists warn.