Retailers’ Optimism Dampened By Shortages, Not Yet By Rates

Paul Zahra, the chief executive of the Australian Retailers Association, noted in his article in the Australian that retailers are concerned about supply-chain issues and labour shortages going into the Christmas period. These two factors are dampening their optimism.

• Strong demand with continuing supply problems could put further pressure on retail prices going into year end, which would be an unwelcome development for the RBA.
• Zahra acknowledges the threat of higher rates and inflation but observes that they are yet to hit retail spending and doesn’t expect them to have an impact until next year.
• The retail sector has been one of the worst hit by the tight labour market. Job vacancies are up 14.4% since May. Retailers don’t expect to be able to fill all of their Christmas positions.
• Two-thirds of members of the Australian Retailers Association have said that local and overseas supply chains have either stayed the same or deteriorated over the previous three months. Zahra notes that few believe they’ll improve this year.