GST hits retail

GST hits retail

Resellers across the country reported slower-than-usual sales over the past month, with many concerned consumers holding on to their dollars as the GST begins to take effect.

This disturbing trend, exposed by resellers ARN spoke to last week, is backed up by market analysis released last week by channel researcher Inform, which showed July's PC sales 24 per cent down on those in June.

Timothy Ellis, managing director of Adelaide- based computer consultancy Computers are Go, made some comments that have been echoed throughout the channel.

"Australians are not buying at the moment - the only people who are are tourists, and they don't buy computers," Ellis said.

Vincent Le Plastrier, national computer merchandise manager of Betta Stores, is keeping an eye on the market due to the company's recent acquisition of 65 Vox stores throughout Australia, and has noticed the slump.

"In the retail sector, our mum and dad markets go to ground when there's some bad news on the TV," Le Plastrier said. "[At the moment] the dollar is in a mess, oil prices are high, there are protests and fuel shortages in Europe."

However, Le Plastrier believes that the downturn is largely climatic and not of any great concern in the long run. "September is always slow. At this time of year people focus elsewhere, but things should pick up towards Christmas."

While larger retailers are putting the slump in PC sales down to September blues, smaller retailers are scared that GST-led consumer prudence may go on to destroy all important Christmas sales. Jerry Zajac, managing director of JCMN Computer Sales and Repairs in Sydney, believes the good times are over for IT sales. "The boom happened before the GST. Now sales are down to buggery, and its not just me that is feeling it," he said.

According to Zajac, sales at JCMN are down about 50 per cent, as consumer and SME spending is pared back. "All the small retailers are being squeezed out because people are not going out of their houses to buy things. The GST is killing the retail sector," he said.

Merdad Shetab, managing director of retailer Computer Interchange, has noticed the slump across his 13 Sydney stores. "It has been an unusual year and although sales are down I am not going to panic yet. If it is still bad at the end of the year, I might start to get concerned."

Shetab attributes the downturn to a number of issues, including the Olympics, the implementation of the GST and school holidays, commenting that these have all contributed to a skewing of a month that is generally quiet.

Unlike the big players, smaller retailers are not able to cushion the blow of slow sales, and are concerned about the slump.

Karen Jane, general manager of Western Australian-based Notebook Computer Rental and Sales, said she had noticed a fall in sales, however she puts that down to a contrast with the boom prior to GST D-Day.

"Sales have definitely dropped, especially in the last two to three weeks. We are really noticing a bit of a slump in September," Jane said.

However, others, such as Computers are Go's Ellis, believe the implementation of the GST and a reduction in customer spending has led to a sales dive across the SME sector.

"I have other small business clients who need computers now to implement their GST accounting but they can't buy them because they don't have any money coming in either," Ellis said.

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