Consumer electronics retail got a double stimulus today with a 1% interest cut and an announcement by the Federal Government that they are set to pour more money into the economy in an effort to prevent Australia’s economy from sliding into a recession.
Early this afternoon the Reserve Bank of Australia slashed interest rates to 3.25% a move that executives at JB Hi Fi and Harvey Norman welcomed.
“We anticipated 1% and we believe it will help retailers,” said David Ackery the General Manager of Electrical at Harvey Norman.
Earlier in the day the Federal Government announced that they are set to tip more than $40 billion into infrastructure, public housing, business tax breaks and one-off cash payments in an effort to prevent the Australian market going into recession.
Kay Spencer the CEO of NARTA, one of the largest buying groups in Australia said, “We saw what the boost to the economy did for the consumer electronics industry over the Xmas New Year period and I believe that the latest cuts to interest rates along with further Government stimulus will help the industry.”
On the issue of discounting and stock levels she said, “Several retailers are suffering from a lack of stock. There are a lot of back orders in the channel however we do need further price increases and we need margin kept in the channel going forward”.
She added “We also need new models and new products to motivate consumers to spend” she said”.
Currently the Federal Government is forecasting that unemployment will rise to 7 per cent next year a move which Gerry Harvey the Chairman of Harvey Norman said recently would lead to a recession.
Prime Minister Kevin Rudd says the plan provides a basis to see Australia through the crisis, but he has conceded it will not eliminate the country’s economic woes.