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| Small stores expect flat trading |
   
Posted Date: 22/02/2012
By Inside Retail
Listed retailers like Super Retail Group and the Reject Shop may be reporting increased profits, but Australia’s smallest retailers are anticipating a gloomy year ahead.
Research by the Australian Gift and Homewares (AGHA) provides a glimpse into the recent trading conditions experienced by a number of retail members who remain cautious about the start of the 2012 period after their predictions of a flat Christmas and New Year spending were realised.
The AGHA says its retail members make up an important part of Australia’s retail sector, with the majority being small and medium sized businesses, with turnover averaging just $334,000 annually.
The AGHA’s latest retail member survey found 47 per cent of respondents recorded lower monetary value from customer purchases made in December 2011 compared with the same month in 2010 – typically one of the biggest boom times of the year for the industry.
Forty eight percent also said customers purchased less in dollar value during the post-Christmas sales (26 Dec 2011 – 30 Jan 2012), as compared to the same period in 2010-11, while 26 per cent said customers purchased around about the same in dollar terms.
Meanwhile, 42 per cent said they purchased less ‘sale’ stock specifically for the 2011-12 post-Christmas sales period, while 39.5 percent indicated they purchased about the same amount, showing continued caution in the face of ongoing downturn.
Of those who purchased stock specifically for the 2011-12 post-Christmas ‘sales’, 47 per cent said some remained unsold at January 30.
Looking ahead into 2012, 46 per cent of respondents believe that the expected value of customer purchases for the first quarter of 2012 will be lower than that of the same period in 2011, continuing the trend.
AGHA’s CEO David Leek said the results show retailers are continuing to tread water in tough times where consumers seem to be taking a perpetually frugal approach in how they spend their money.
“While interest rate cuts are always welcome news for retailers who rely on consumers’ discretionary spending, the fact that two interest rate cuts late in 2011 seemingly did little to boost consumer spending in the immediate months following demonstrates that the industry needs to be doing more than just relying on cuts to the official cash rate to boost trade,” Leek said.
“Most of our members are already differentiating themselves from the bigger players effectively by sourcing exciting new products that will fit with customer demand and offering value-added customer service. We will continue to encourage them to innovate to position our industry as one where you can have a truly magnificent shopping experience.” |
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