Retail industry bodies the Australian Retailers Association (ARA) and the Australian National Retailers Association (ANRA) both have supported the Rudd Government’s announcement of its $10.4 billion Economic Security Strategy including handouts and tax rebates for pensioners and other consumers.

“The Rudd Government’s $10.4 billion economic stimulus package will hopefully resuscitate the flagging economy,” said Australian National Retailers Association Margy Osmond.

“Retailers welcome this kick-start to stimulate spending.”

ARA executive director Richard Evans said after successive months of stagnant and declining growth, Australia’s retail sector welcomes any stimulus boosting consumer confidence for a successful Christmas trading season.

“Retailers applaud any move to reinvigorate consumer sentiment and start the upwards trend for consumer spending in time for the 2008 Christmas season. Prime Minister Rudd’s plans for a Christmas bonus is great news for consumers who look forward to enjoying the gift giving tradition of Christmas – and even better news for retailers hard hit by months of reduced consumer demand.”

However, Evans says at the moment it is quite difficult to make projections for retail trade this Christmas. Retailers have suffered a tough year, with no real growth in the first six months of 2008 and only a flicker of growth in July and August.

“The retail sales cycle peaked last Christmas with a year-on-year growth of around 7. 6 per cent, but up until last week, we were expecting this to drop to a year-on-year growth of 4.5 per cent. This equates to retail sales of approximately $36.9 billion up from the $35.4 billion projected for last year.

“However, last week’s interest rate cut of one percentage point and now Prime Minister Kevin Rudd’s plans to give consumers an early Christmas present means we will have to re-evaluate these figures. Hopefully, Christmas predictions will be clearer in the next couple of weeks.”

Osmond said consumer confidence has been at all-time lows this year, despite recent lowering interest rates and tax cuts.

“The credit crisis and rising concerns about unemployment have further hit confidence. The government’s strategy should boost consumer confidence in time for the festive season,” she said.

“Without relying on credit and with some responsible spending, Australian consumers should feel confident to enjoy the upcoming Christmas season. In particular, consumers are expected to make a return to using lay-by for things like bicycles and other children’s Christmas presents that they will pay off over eight to 12 weeks,” added Evans.

ANRA’s annual survey of Christmas shopping trends shows that about 70 per cent of people wait until December to commence their Christmas shopping.

“Our research also shows that four out of 10 Australians spend up to $50 on each person they purchase gifts for. Over 20 per cent spend between $50 and $75 on each person,” said Osmond.

 “Shoppers planning to cut back this Christmas may change their intentions, knowing that relief is in the pipeline.”