This result was despite SME retailers reporting the lowest growth in employment over the past quarter with 23 percent of SME retailers reporting a decrease in staff levels and 11 percent reporting an increase (resulting in a negative 12 percent retail employment growth index).
Size of workforce - retailers
“The March Australian Retailers Index showed retailers suffering with falls in sales performance at negative 18 percent, were doing the right thing by adjusting their business paradigm, reducing other expenses and trying to stimulate consumer spend before letting staff go,” ARA Executive Director Richard Evans said.
Value of sales - retailers
Although a decrease in employment levels was being considered by 14 percent of SME retailers in the past quarter, over 35 percent were reducing other costs as a result of current economic conditions. Almost 20 percent were adding new products and 18 percent were advertising more to try and stimulate consumer spend.
What retailers are doing as a result of current economic conditions
Usually, employment costs are the easiest overhead for managers under pressure to cut, but SME retailers are showing responsible understanding of the importance holding onto staff to stimulate consumer spending and economic recovery,” Evans said.
“We're urging employers right through the supply channels to hold onto their staff who have the key to economic recovery in their pockets. If unemployment levels remain under six percent , the retail sector can expect to see improved growth by the September quarter.”
The Australian Retailers Index also revealed the attitude towards the Federal Government policies at negative five percent with retailers worried about coping with changes to IR laws.
Attitudes to Federal Government policies - Vies of retailers
Confidence fell nine percentage points over the three months to March, taking it to negative six per cent overall. Some 43 per cent of businesses were worried, 37 per cent were confident and 17 per cent were neutral.
The main reasons SMEs in the retail sector lacked confidence were predominantly aligned with economic factors. However there was specific concern regarding media reports fuelling negative consumer sentiment.
Top reasons for being concerned Retail SMEs
“The good news looking forward is that retailers reported higher prospects for the coming quarter with employment growth expectations at positive three percent, this is up by five points from employment expectations for the last quarter,” Evans said. The Australian Retailers' Index analyses the Sensis® Business Index results for businesses in the retail sector, providing a snapshot of the retail sector every quarter in the following categories: retailer confidence; retailer concerns; sales, profitability and employment; capital expenditure; wages and prices and assessment of Federal Government policies.
Download the full March 09 ARA Australian Retail Index.
