Small retailers wary of Rudd

NATIONAL: New data released today in the September ARA Australian Retailers' Index revealed retail support for the Federal Government was low during the past quarter, despite rising 10 points to a negative 22 per cent approval rating. Australian Retailers' Association (ARA) executive director Richard Evans said the index showed the notion remained among 33 per cent of retailers that the Federal Government's policies worked against them.

"The September ARA Australian Retailers' Index shows small business legislators that reducing red tape is the number one priority for retailers, with those unsupportive of Federal Government policies blaming too much paper work and administration. On the other hand, those retailers who are supportive of Government policies (11 per cent) believe they have tried hard to reduce red tape."

Other key reasons Australian retailers believed the Federal Government's policies worked against them included perceptions that fuel price increases had impacted consumer spending and that the Government didn't offer incentives to small business, Evans said.

"Although confidence in Government policies has risen slightly, it seems retailers' expectations are a little ahead of reality with sales performance falling 15 per cent in the past quarter and 52 per cent of retailers experiencing a decrease in sales, despite only 29 per cent of them saying they expected a decrease in sales in the previous quarter.

"We see the same trend with profitability. When retailers were asked about their expectations for the past quarter, 31 per cent of retailers indicated they expected to increase their profits. In fact, only 18 per cent increased profits while 53 per cent of retailers experienced a decrease in profitability. This is a drop of 20 percentage points from the previous quarter's results," Evans said.

"This is a clear warning for small retailers to err on the side of caution and be conservative in their planning - even if they are slowly gaining confidence with the Government.

"What the retail market needs is consumer confidence and this requires government narrative to become more supportive. Now is not the time for politics, rather we need positive government news. Retailers are warming to Prime Minister Rudd but it's 'tough love'," Evans said.