Retailers wary of Rudd government prospect

Retailers are bracing themselves for a change of government at the forthcoming Federal election with 70% expecting Labor to end the Coalition Government’s term of office.

But while most retailers expect Labor to win, 78% believe that John Howard’s Coalition Government offers the best opportunities for their business according to a survey by Inside Retailing Online.

Only 12% of the respondents in the survey believe that a Labor win at the polls will have a positive impact on their retail business with 37% expecting a negative impact and 51% uncertain about the implications.

Respondents to the survey at nominated IR and workplace relations (17%), economic management (12%) and taxes and charges (11%) as the key business issues for the election campaign.

Other issues that were considered important in the context of the Federal election and nominated by 7% of survey respondents were education, skills shortages, regulation and red tape.

Respondents also nominated water, public infrastructure including roads and ports, and climate change initiatives as issues on which retail businesses would be evaluating the policy platforms of the political parties.

Retail tenancy laws and competition regulation were not high priorities with retailers on the policy agenda – and manufacturing closures, tariffs and import controls, terrorism and franchising laws were not regarded as key issues at all.

Asked what areas of their own business was of most concern for the year ahead, survey respondents nominated finding staff (13%) and retaining staff (13%) as the most important issues.

Around 8% of retailers expressed concerns about rising interest rates, a similar percentage to those who nominated changes to IR laws and a change in the Federal Government as the key issue for them in the next 12 months.

Other concerns nominated by survey respondents were supply chain issues and government regulations, each at 7% , and higher wage costs and skills shortages/training issues, each at 6%.

There were 5% of respondents who nominated IT and communications as an area of concern in their business in the year ahead.

Respondents to the survey were generally bullish about sales and earnings for the year ahead, irrespective of the political environment.

A total of 82% of respondents expected sales to increase in the year ahead and 51% forecast higher earnings.

While 12% expect sales in the next 12 months to be similar to current levels, 41% of respondents anticipate margins and earnings will remain about the same in the year ahead.

Of those respondents forecasting increased sales, 23% expect a modest gain of 1-3% and 33% expect a 3-5% increase.

Around 26% of retailers expecting to increase sales in the year ahead hope revenues will jump by more than 10%, while 18% believe their sales increases will be in the 5-10% band.

Inside Retailing Online regularly polls more than 250 retail executives on retail industry, consumer and government issues.

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