Poor Christmas hurts

SMALL retailers claim the widely reported strong Christmas trading results have not filtered through to them.

WA Retailers Association of WA CEO Martin Dempsey said small traders were reporting a poor Christmas and an unhappy New Year.

He said the post-Christmas slump was starting to bite and the February 4 Business Activity Statement was likely to cause small shopkeepers some more pain.

"The small end of town cannot afford 40 per cent to 50 per cent off sales to attract customers like the big traders can," he said.

That news largely contrasted with reports from the Retail Traders Association that showed Christmas trading had either met or exceeded expectations.

RTA manager Brian Reynolds said the lead up to Christmas had met expectations but he confirmed later sales had been disappointing.

The post-Christmas slump left retail major Coles Myer publically wondering whether it would meet its 2001 sales targets.

Its shares fell 6 per cent on the news. Harvey Norman shares dropped 3.1 per cent and David Jones' share price shed 6.4¢.

The Chamber of Commerce and Industry's Business Expectations survey for the December quarter indicated business confidence rose after three successive falls.

The survey found conditions improved only marginally and more firms were reporting weaker general economic conditions.

Sales conditions returned to a similar level to that recorded for June but a larger proportion of firms are still reporting weaker sales compared to those reporting higher turnover.

Smaller firms are more pessimistic about their outlook than larger firms.

Mr Dempsey said the forthcoming BAS would bite into small traders' profits and the next one would cause some businesses to close their doors.

This BAS threatens cashflow problems for small businesses because they will not get the benefit of wholesale sales tax refunds.

"Despite all the assurances that the GST compliances would not cost small businesses any more, they've made us realise the costs for everything have gone up," Mr Dempsey said.

"Utility costs such as power have gone up with the GST. A business can claim its GST back as an input tax credit but its customers can't.

"Because of that customers' disposable income is reduced.

"Things such as dropping state taxes have slipped out the back door."

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