Consumers not persuaded by heavy discounts: business survey

By Keri Algar

SYDNEY, NSW: The Dun & Bradstreet survey suggests consumers are not being persuaded to spend and that they are ignoring the heavy discounts seen across the retail sector in Australia. Price deflation has also had an impact on the profits index.

Sales expectations are at their lowest in almost two years, afflicted by a ‘particularly weak’ retail sector, said the report released today. Sales expectations have dropped 14 points to an index of 17; however, this is still 4 points above the 10-year average.

The fallout from this will impact suppliers in the wholesale and manufacturing industries, according to Dun & Bradstreet CEO Christine Christain.

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“Heavy discounting by retailers does not appear to be dissuading consumers from paying down their debt and increasing their savings,” said Christian.

“Retailers now appear to be accepting the permanency of this trend and have adjusted their expectations for the June quarter accordingly. As a result manufacturers and wholesalers have also lowered their expectations and the consumer effect washes through the supply chain.”

The survey has also revealed that 38 percent of executives expect an increase in sales for the June quarter, while 21 percent expect a decrease. Unsurprisingly, the profits index is down 17 points to 13, with 32 percent of executives expecting profits to rise and 19 percent expecting a fall.

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