31/01/2017 - 13:37

Confidence key, retailers say

31/01/2017 - 13:37

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Local businesses aren’t popping the champagne corks for an economic recovery just yet despite the latest data from the Commonwealth Bank showing a rise in transactions across a range of sectors during the Christmas trading period.

Eddie Peters says the business community needs to be positive. Photo: Attila Csaszar

Local businesses aren’t popping the champagne corks for an economic recovery just yet despite the latest data from the Commonwealth Bank showing a rise in transactions across a range of sectors during the Christmas trading period.

Sales in December 2016 were up 0.9 per cent on November after adjusting for seasonal movements, according to the bank’s monthly Business Sales Index.

That index relies on data collected on transactions the bank processes through its merchant facilities, tracking the value of credit and debit card payments.

It covers a broad group of spending items, including retail sales, new cars, personal services and air travel.

Although the index does not break down by sectors within a state, the national data indicated that retail fared poorly over Christmas, with a 0.2 per cent drop in sales.

The Honda Shop owner Eddie Peters said Christmas had been a flat trading period at his Midland motorcycle shop, and for other business owners he had spoken to.

“I’m speaking to a lot of business people, and not just small business people but all different sizes, and I suppose the best way to describe our Christmas trading period was flat,” Mr Peters told Business News.

“We were actually hoping for it to be better than last year, (but) it was just quite ordinary.”

That trend had continued into January, he said.

But Mr Peters felt it was important for businesses to start refocusing on what they could do to turn things around and bring back positivity.

“We keep on using the excuse of the mining boom, we need to get over it,” Mr Peters said.

“We need them all (leaders) to be positive and start getting things moving.

“We need shires and bureaucracies to stop throwing hurdles in front of projects.

“I think that we’re going to see things turn around this year, but the speed of it is going to depend on how we all deal with it.”

Coriolis Research director Tim Morris said he was usually cautious relying on early data from banks and other sources in judging the strength of spending.

“The thing with Christmas is, at a high level we almost always get there,” Mr Morris told Business News.

“Mums and dads want presents under the tree for the kids, everyone always says ‘I’ve worked real hard this year, I deserve a treat’.

“There’s those inevitable expenses, especially in the Southern Hemisphere, where it’s the height of summer, and you get all of the holiday season and you get New Year.

“People find the money to spend, so we often get there on Christmas.

What happens in the months after Christmas is equally important, he said, with the hangover in February and March, as households would seek to pay off credit card bills.

“The real test of the resilience of the economy is March,” Mr Morris said. “I think there’s going to be a bit of pain around.”

Here’s Luck Lottery owner Raj Selvendra said people were spending less at his Belmont Forum business, although turnover was similar to December 2015.

“(That’s) because we’ve got more customers coming in,” he said.

A new marketing campaign and a large jackpot helped bring the customers into his shop, which exclusively sold lottery games, Mr Selvendra said. Weakness in the labour market was likely to affect consumer confidence in the year ahead.

“This year is going to be a very tough year because we’ve got record levels of people unemployed,” Mr Selvendra said.

“Those who are employed are afraid of losing their jobs, they’re very uncertain. Therefore people are very cautious about spending.

“We have a very low consumer confidence level, extremely low.”

Helloworld manager Debbie Nazzari said her 2017 had got off to a great start.

Ms Nazzari owns a travel agency, also in Belmont, and said January had been an amazing month thanks to airline sales.

Christmas was usually the quiet time for her business, she said, however turnover in December 2016 had been very close to the previous year. However, other business owners told Business News they felt the state’s economy was doing worse than others nationwide.

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