By Patrick Avenell
The removal of Australia’s 27th Prime Minister and the reinstallation of the nation’s 26th should instil some confidence back in to the retail sector, though only an election can truly resolve this malaise, according to ARA executive director Russell Zimmerman.
“The big issue for retailers is that they are hoping for stability in government,” he said. “The general consumer is also looking for some stability in government and some leadership.
“What we’re hoping for is that now that the arguments between the various factions are over, we’ll see some stability.”
Insiders close to Prime Minister Rudd were commenting yesterday that Australia will now go to a federal election on 3 August 2013 — 42 days sooner the former Prime Minister Gillard’s pre-announced date, 14 September 2013.
Retailers would prefer the August date, Zimmerman said.
“The quicker there is an election – I agree with Tony Abbott [on this point] – so that the people can decide, the better off we’ll be, quite frankly.”
Zimmerman’s reasoning is that an election would most likely result in the end of minority government, regardless of the winning party, which will inject more confidence in the future for consumers.
“If there is some stability and leadership then hopefully people can get on with the business of doing business and we’ll see some retail increases,” he said. “The real crux of this is that the quicker we see an election the better off we’ll all be.
“When people are not comfortable with what is happening in politics or when there are problems overseas, that tends to breed problems in retail because you don’t have consumer confidence.
“We have worldwide issues too, and Australia is doing fairly well, but there is always room for improvement.”
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Nick Fry from Leading Appliances said the return of Kevin Rudd "may lead to an earlier election, which would be a Godsend for small independent retailers".
Suppliers in the appliance industry broadly agree with Zimmerman.
In a feature to be published in the July issue of Appliance Retailer magazine, Breville Australia GM Jeremy Sargeant said expected business to be “patchy” in the lead-up to an election, while Eurolinx (ILVE and De Dietrich) MD Jamey Colbert lamented the impact a “long, drawn-out election year” has on consumer confidence.
On a more positive note, GfK Retail & Technology ANZ managing director of Consumer Choices, Gary Lamb, said there were several positive indicators in the market, suggesting a quick turnaround once stability has been restored.
“Interest rates and unemployment figures remain low and stable, and this appears to be reflected in relatively strong consumer confidence, but there’s a federal election on its way, so that is almost certain to have a bearing on the rate at which the electricals markets recover,” Lamb said.
“However, there appears to be enough evidence in recent trends to suggest that the gradual improvement will continue.”