SYDNEY: Department stores are the worst casualties of current crackdowns in consumer spending, according to new retail trade figures from the Australian Bureau of Statistics (ABS).
The sector plummeted nearly 10 per cent in February, an indication that consumers were cutting back on discretionary items.
Commenting on the data Margy Osmond, CEO of the Australian National Retailers Association, said the spurt in consumer spending in December and January - fuelled by lower interest rates and government bonus payments - had slowed.
Overall the Australian retail sector declined by two per cent in February, demonstrating the biggest decline since the introduction of the GST in July 2000. The fall was a direct contrast to December and January - which recorded increases of 3.8 per cent and 0.5 per cent.
Osmond said that approximately $1.55 billion of the Government's first economic stimulus package was spent in retail, adding she expected the next instalment to help improve overall market figures.
"A second and larger round of cash bonuses is now underway. Judging by the effects of the first stimulus package, we believe the second package may inject about $2.4 billion into the retail sector over the next four months," Osmond said.
She also emphasised that another interest rate cut would help to regain consumer confidence.
"Australians are still not feeling that confident about spending and another interest rate cut next week is clearly needed," she said.
"Monetary policy must continue to make its contribution. We would urge the RBA to consider another 0.5 per cent cut to interest rates when it meets next week."