Retail spending is starting to slow as interest rates reach 10-year highs, but should retailers be doing more to help the Reserve Bank tame inflation?
Super Retail Group managing director Anthony Heraghty says consumer spending is shifting from “wants to needs”.The mixed signals suggest the Reserve Bank is unlikely to hit pause any time soon on interest rate rises, withtelling a Senate committee on Wednesday that nine consecutive rate rises had not done enough to dampen household spending and inflation and more rate rises were necessary.
In JB Hi-Fi’s Australian business, gross margins improved to 22.8 per cent in the December-half 2022 compared with 22.1 per cent in the first half of 2020, while cost of doing business has fallen to 11.4 per cent from 11.9 per cent. “Some of our retail businesses didn’t benefit to the same extent as others did in extracting much higher full priced sales and higher margin through COVID, but we’ve maintained the trust of customers by keeping our prices low and that seems to be resonating well across our retail businesses at the moment,” Wesfarmers managing director Rob Scott told Window Shopping.
JB Hi-Fi chief Terry Smart: “If there is less spending available in the economy we have to get sharper with our price.” Sales growth at JB Hi-Fi’s Australian stores slowed in January from 9.1 per cent in the December-half to 2.5 per cent, while sales at The Good Guys were flat last month after growing 7.3 per cent in the previous six months.Advertisement
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