Retailers place hope on mid-year sales, expect droves of shoppers
The time has come for Australia's mid-year sale as retailers offer big price slashes in hopes of getting the elusive attention of shoppers turned away by consecutive rate hikes with Australian National Retailers Association (ANRA) chief executive Margy Osmond admitting that consumers would shy away from stores unless bargain finds are on the shelves.
Leading department stores Myer and David Jones tagged their products on Wednesday with up to 50 percent off in order to match sales of the yearly Boxing Day sales.
April retail figures showed 0.6 percent seasonally adjusted jump from March but the spending trend has yet to reflect the possible effects of the last rate movement in May, which has been routinely passed on by major banks.
Ms Osmond said that any sort of rates movement would affect shoppers' willingness to hit the stores, as she added that "the uncertainty of what may or may not happen with those rates is going to continue to have an impact on the confidence that we saw earlier this month."
She pointed out that jumps in interest rates usually affect the retail sector of the mortgage-wary NSW while other factors such as the Australian dollar could greatly reduce nationwide consumer confidence.
Ms Osmond said that the mid-year sale serves as a big break for most shoppers, underscoring the fact that the past 12 months has been very difficult for retailers too who were forced to cut deeply into their profit margin.
She said that the retail industry has been absorbing the heat of a two-speed economy, which sadly has not been "recovering at the same rate as the mining or the resource industry."
ANRA said that the mid-year sales should run for the next two weeks with more retailers entering the picture in the next few days, most likely encouraged by the Reserve Bank of Australia's (RBA) decision to pause the rate increase this June and possibly hold off more hikes in the next month.