Low inflation and fuel costs look set to boost retail spending, according to a peak industry body.
The Consumer Price Index (CPI) released yesterday showed inflation of 0.2 percent in the 2014 December quarter which followed a rise of 0.5 percent in the September quarter.
This provided an explanation of reduced pricing during the 2014 Christmas period.
The CPI rose 1.7 percent in the year to the December quarter compared with a rise of 2.3 percent in the September quarter showing a slow yet steady pace in the lead up to Christmas 2014 sales.
ARA Executive Director Russell Zimmerman said retailers kept prices low through discounting over the Christmas period.
“There is no doubt lower fuel costs will flow through the supply chain which will further reduce costs, leaving more cash in consumer pockets to drive retail sales,” Zimmerman said.
While there has been some pressure from the higher Australian dollar on imports, all indications show lower fuel costs and fierce competition to drive costs lower.
The Australian Retailers Association now looks towards the release of the December retail trade figures to confirm its pre-Christmas predictions of $45 billion which is expected to be an influence of today’s CPI December quarter figures.