Strong growth in spending on clothes and gardening equipment underlines the case for further interest rate rises, but retailers are urging the RBA to hold fire.
Economists say an early spring splurge on clothes and gardening equipment underlines the case for further interest rate rises, but retailers are urging the Reserve Bank to hold fire amid fears of a tough Christmas selling season.
But retailers have urged Ms Bullock to hold fire as the sector braces for the all-important Christmas shopping season, when discretionary retailers make two-thirds of their profit for the year. Chris Tourgelis, chief executive at Opus, said the gift retailer had experienced a very soft winter at its stores in Paddington and Newtown in Sydney.“It is definitely a tough environment at the moment. It’s not just interest rates for us, but the cost of doing business, like insurance, electricity, and wages,” Mr Tourgelis told‘Christmas is like final exams, you have to nail it.’: Chris Tourgelis of gift retailer Opus Design.
Despite the winter softness, Mr Tourgelis said he was optimistic about Christmas. Opus usually hires around 10 casual staff for the period, when the business makes about 70 per cent of its annual profits.Oxford Economics head of macroeconomic forecasting Sean Langcake said the strength in spending in September bolstered the case for an interest rate rise next month.
The ABS said some of the increase in sales last month was due to one-off factors that were unlikely to be repeated.“The warmer-than-usual start to spring lifted turnover at departments stores, household goods and clothing retailers, with more spending on hardware, gardening, and clothing items,” ABS head of retail statistics Ben Dorber said.
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