Retailers angry their warnings not heeded – THE LONG SLOW CRASH OF ’08
Stapleton, John. The Australian [Canberra, A.C.T] 13 Oct 2008: 3.
Show highlighting
Abstract
“Unless you are highly geared in loans and playing the stock market, you still have money to spend,” he said. “Consumers need to understand that. The only thing that has changed is their confidence. The old cliche is true, the only thing to fear is fear itself. If consumers stop spending, cash flow stops right through the market.”
“People are obviously talking about the risk of a recession,” he said. “The tabloid papers have been putting the financial crisis on their front pages in bleak terms.
Full Text
RETAILERS have attacked the Government for not listening to shopkeepers’ warnings about a financial downturn and for worsening consumer confidence with inappropriate rhetoric.
The Westpac-Melbourne Institute consumer sentiment index, released last Wednesday, showed consumer confidence was at its lowest in almost 20 years and consumers were less inclined to purchase a major household item than at any time since the 1970s.
Australian Retail Association executive director Richard Evans said: “When retailers were out there talking about the state of themarket, other folk were not paying heed, still increasing interest rates and talking down the economy with comments about the`inflation genie’. All the negative talk really impacted.
“We are the barometer of the economy and a lot of shopkeepers already knew the economy was on the downturn. Retailers were ignored.”
Mr Evans welcomed the change in the Government’s rhetoric, including Kevin Rudd’s comments yesterday guaranteeing bank funds, as long overdue.
“Unless you are highly geared in loans and playing the stock market, you still have money to spend,” he said. “Consumers need to understand that. The only thing that has changed is their confidence. The old cliche is true, the only thing to fear is fear itself. If consumers stop spending, cash flow stops right through the market.”
ANZ chief economist Saul Eslake said he would be astonished if consumer confidence didn’t fall further.
“People are obviously talking about the risk of a recession,” he said. “The tabloid papers have been putting the financial crisis on their front pages in bleak terms.
“As a result there is a broad percentage of the population concerned about movements on the stock market. People with superannuation savings or investments of their own on the stock market must be really frightened by what has happened in the last couple of weeks.”
Credit: John Stapleton