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 13 June 2000Retailers Move Faster Just to Stand Still Continued massive price discounting was evident throughout most sectors of the retail market in April. Retailers were effectively pushing more goods on to the market at discount prices just to maintain their business cash flow. This year's Summer season sales, which are just beginning to get underway, will be a real test of the market, and determine whether the somewhat better underlying consumer demand can be maintained. Maintaining positive retails sales numbers will certainly be more difficult in the next few months as they will be measured off better results last year. Real retail sales figures began turning positive in July 1999 and grew from thereon. The April figures out today suggest that in current dollar terms retail sales have settled around the $15.5 billion a month mark ($15.52 billion in April), after hitting $17.6 billion in January. As a result, they are not much above the annual monthly average in 1999 of $14.9 billion a month, and it has only been the severe price discounting throughout the sector that has given it a modest boost. Of all retail outlets listed in the monthly figures only motor vehicle distributors and purveyors of jewellery, watches and clocks and valuable goods have been able to maintain both prices and volumes. Average retail sales this year, while above their 1999 level are still well below the $16.3 billion a month average in 1998, which was a recession year, and the record $19.6 billion a month achieved in the healthy 1997 year. Currently, both the summer sales season and rises in interest
rates, as well as the stalled stock market, hang over the entire retail sector. How it
emerges from the summer could well depend on these key factors.
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