News dalla rete ITA

12 Ottobre 2020

Australia

RETAILERS EXPECT CONSUMERS TO SPOIL THEMSELVES

Citigroup estimates the personal tax cuts, which are worth $12.5 billion this year, together with a further $2.5 billion in pensioner payments, could boost retail sales by 1.5 to 2.5 per cent, potentially lifting retailers' earnings by 3 per cent to 7 per cent.The question is whether consumers will have the confidence to spend the extra cash – estimated to be worth $20 to $48 a week for the people who get them – or, with unemployment mounting and house prices falling, whether they will save it for a rainy day.Retail leaders unanimously welcomed the budget, saying it would boost consumer confidence and spending as the stimulus from JobKeeper and the JobSeeker supplement started to unwind.Wesfarmers managing director Rob Scott said the budget rightly focused on many of the critical short term impacts of COVID-19 – jobs, investment and household incomes – and would give businesses more confidence to employ and invest and encourage households and families to invest in their future.Woolworths CEO Brad Banducci said the budget would help move the economy back towards a path of sustainable economic growth and job creation.Citigroup's head of research, Craig Woolford, said the budget would result in a significant drop in the total stimulus provided to households in calendar 2021 compared with 2020.The outcome for retail spending this year would depend on consumers' willingness to dip into their savings, which have risen during the pandemic, and the impact of the budget on employment and housing.Citigroup estimated JobMaker hiring subsidies could help retailers – especially major chains such as Woolworths and Coles, which employ large numbers of younger workers – reduce wage bills, boosting earnings by up to 1 per cent.The JobTrainer fund, which is designed to support 100,000 apprenticeships, could boost hardware and IT sales – helping retailers such as JB Hi-Fi, Harvey Norman and Wesfarmers' Officeworks – but will have a modest impact on wage costs given the low levels of apprentices used in retail.Retailers with sales of less than $5 billion – including Mr Lew's Premier and Breville Group, Super Retail Group, Accent Group, Kogan.com, Temple & Webster and Nick Scali – also stood to benefit from the expansion of the instant asset write-off scheme.The ability to write off 100 per cent of capital investments could boost retailers' operating cash flow by between 5 and 10 per cent, Citigroup said.The Australian Retailers Association and the National Retail Association also welcomed the budget, saying personal tax cuts and cash payments of $500 for those on welfare would help stimulate spending, while the $105 million loss carry-back scheme would be a boon for smaller retailers forced into the red by the coronavirus pandemic. (ICE SYDNEY)


Fonte notizia: The Australian Financial Review 7/10/2020