A new prediction find that retail sales of Australia should enjoy sturdy growth in upcoming years, but increased petrol prices and interest rates will leave this segment trampling water now.
As per the Access Economics' recent report on retail forecast, the hikes in interest rate in May & August and large costs borne by motorists at petrol station had shattered the consumer's confidence. But, tax cuts worth $9 billion that were introduced in July, however, were, the "big bucks", amending three billion of US dollars in costs from the year of rising petrol prices and $4 billion in costs from increased rates.
According to Access Economics "We find the specific factors of reductions in tax, petrol prices and interest rates, as roughly negating each other in their effort to effect the customer's spending capability and willingness". Continued strong growth in income will be the chief driver of Australia's retail prospects. Retail proliferation in Australia would "tread water" in this fiscal, before reaching the peak in 2007-2008, as prices of housing construction rise again.
The report hints inflation-adjusted turnover of retail to increase by 3.6% in this fiscal, after a low 2.4% in 2005-2006. Turnover is predicted to increase by 4.2% in 2007-2008 before coming to 3.7% in 2008-2009 and then dropping to 1.3% in 2009-2010.
Access said that retail sales showed an increase in 2006, reviving from a low figure of 1.3% in mid-2005, due to boom in commodity price and strong growth in jobs. Non-food and food products did well, with department stores, clothing sales, restaurants and cafes all contributing in the recovery.
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