Retailers expect a tough ride ahead

Retailers expect a tough ride ahead

Retailers are expecting the market to get tougher throughout this financial year despite ongoing demand for IT and CE products. However, the Federal Government’s financial injection into the economy and another looming rate cut by the Reserve Bank could prove the saviour in the face of recession.

Bing Lee general manager, Phil Moujaes, witnessed a slowdown in business in September, but said consumer electronics and IT were still in strong demand.

“We’ve had good sales all the way up to the Olympic period,” he said. “There are enough incentives for consumers to buy notebooks or a new plasma/LCD TV. The fact there’s such a big range of notebooks under $1000 has increased unit sales quite dramatically.”

Moujaes was hopeful the government’s injection of cash into the market in December would help spur demand around the pre-Christmas period.

IDC PC analyst, Felipe Rego, said the market would continue to be tough for retailers and their success came down to how well they ran their business. Rego also noted strong interest in small form factor notebooks due to their low price points.

Vita Group CEO, David McMahon, said sales were off their peak in comparison to last year but remained solid. Vita owns retail chain, Fone Zone and Next Byte.

“What we’ve seen in the past two months is stabilisation of these sales levels, in fact we’re seeing a slight lift in October,” he said.

According to McMahon, mobile sales tended to be consistent across down periods, because customers could upgrade and still get a new handset without paying for the device upfront. He also noted more consumers were opting to go on a 24-month contract when purchasing computers rather than paying for them upfront.

“We’ve certainly seen a shift towards that trend over the past two to three months,” he said. “Internally we’re in line with our own sales expectations and forecast, but in saying that we had anticipated tougher retail times.”

Despite the economic turmoil, McMahon remained optimistic the second half of the year would perform much better than the first half.

“We’re not going to see a strong recovery in consumer sentiment, but we think we’ll see that improve for the remainder for the financial year,” he said.

JB Hi-Fi CEO, Richard Uechtritz, said weak consumer sentiment would have an effect on all retailers. Despite this, he claimed the retail chain experienced strong sales in July, August and September.

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