|Retailers expecting rush on back of stimulus payments, interest rates cut
The Australian (National Metropolitan, 4 February 2009)
GERRY Harvey, the man behind the country's biggest electrical retailer, is bracing for a rush of customers, with a cash windfall of $950 and a cut in interest rates of 100 basis points certain to encourage people to splash out.
"You can buy lots of things with $950, from flat-screen TVs to a fridge, but not necessarily the best brands," the executive chairman of Harvey Norman said yesterday.
"Yes, the Rudd Government's economic stimulus to give $950 to individuals earning $100,000 or less would help sales at Harvey Norman stores.
"I've been visiting stores, and customers are certainly not downbeat. They are concerned as they read so much about the downturn. I speak to my tradespeople - while most have projects in the pipeline, many are worried because they don't know how long it would last."
Bernie Brookes, chief executive of Myer department stores, said the cash bonus would be only a "short-term" benefit for retailers, The Australian reports.
"It would definitely help customers spend more on basic items such as food, essential clothing, beer and drinks at pubs and clubs," he said.
"But the money would not necessarily encourage people to spend more on discretionary items such as homeware and apparel, which are suffering under the current economic climate.
"People are still frightened by rising unemployment levels."
While he applauded the government initiatives, he bemoaned the lack of tax incentives for business to invest in capital expenditure.
Iain Nairn, who heads the 200-store fashion retailer Witchery, agreed the one-off cash payment would deliver a short-lived boost to sales.
"But I think people would prefer to save and pay off debt rather than shop for new clothes in the current climate," he said. | End