By Aimee Chanthadavong

The federal election date may have been set for 7 September 2013 but the political uncertainty continues to affect consumer confidence.

The ABS figures indicated flat trading for June 2013, seasonally adjusted, following a 0.2 per cent rise in May 2013.

NRA chief executive Trevor Evans said the unchanged retail trade figures demonstrated growth in the vital retail sector had stalled as consumers waited for an election outcome and a stable and forward-looking government.

“Despite the announcement of an election date, consumer confidence is still low as households respond to the uncertainty caused by government instability, some pessimistic forecasts for jobs and mining investment, and news of the worsening budget position,” he said.

“Shoppers are clearly still waiting for a stable, longer term plan for the economy before they loosen their purse strings, and this can be seen with the flat retail trade figures.”

The latest figures show the biggest turnover was in cafes, restaurants and takeaway food services which was up 0.9 per cent, followed by household goods retailing at 0.3 per cent and food retailing at 0.1 per cent.

These rises were offset by falls in other retailing (-1.1 per cent) and clothing, footwear and personal accessory retailing (-0.2 per cent). Department stores (0.0 per cent) was relatively unchanged. Over the longer term, food retailing remains the strongest contributor to growth, up 0.2 per cent in trend terms.

“The slight increase in seasonally adjusted month-on-month growth in food retailing (0.1 percent) and cafes, restaurants and takeaway food (0.9 percent) shows that consumers are treating themselves to meals and entertainment rather than purchasing goods,” Russell Zimmerman, Australian Retailers Association (ARA) executive director, said.

“Overall, the unchanged figures may be a reflection of consumer nervousness in discretionary spending due to instability in government. It is evident there is a lack of consumer confidence in the whole economic situation in Australia and the federal election couldn’t come soon enough.

“Retailers are facing significant cost pressure at the moment, including coming to grips with the fourth transition of the modern award penalty rate, increases to minimum wage and increases to superannuation of 0.25 per cent as of July 1. It is time for the Government or alternative government to step in and increase consumer confidence by showing strong economic leadership and reform.”

As a result, there’s an overall agreement between retailers another rate cut from the Reserve Banks is needed to stimulate any spending.

“Last week’s Economic Statement confirmed there is unlikely to be a substantial injection of government spending into the economy – no matter what the outcome of the election on September 7. This means any stimulus to household spending is going to need to come from the Reserve Bank, in the form of lower interest rates,” Australian National Retailers Association (ANRA) CEO Margy Osmond said.

“It will be critical for the incumbent government to address confidence in the current economic conditions and ensure they don’t spook consumers to retreat even further from spending.”