Australians are back shopping again due in part to the recent distribution by the Federal Government of carbon rebates, gambling is up and so are sales of iPads.The $2 billion handout has seen increased sales at retailers including JB Hi Fi, Harvey Norman, Big Lee and the Good Guys since the handouts hit mailboxes according to the Australian Retailers Association.
Harvey Norman told Bloomberg that lower-income areas that received rebates are outperforming richer neighborhoods, while Woolworths said less-affluent shoppers were buying Apple iPads.
According to Telstra, the carrier has benefited with consumers buying Samsung Galaxy S3s and Apple iPads.
At JB Hi Fi, the Company has seen a surge in demand for headphones and wireless audio, along music attach gear.
“You put dollars in people’s pockets and they’ll spend it,” Craig James, chief economist at the Commonwealth Bank CommSec, said. “It’s a perfect storm of positive factors: the oil price coming down, interest- rate cuts and government handouts.”
It’s early to judge whether Australia’s retail sector has turned the corner, James said. Home prices, which affect the mood of shoppers, were down 3.6 percent in June from a year earlier in state and territory capital cities, according to an index published by data companies RP Data and Rismark International. “There’s still a degree of angst in the community,” said James.
Michael Simotas, a consumer analyst at Deutsche Bank AG in Sydney said “Every unlisted retailer we’ve spoken to has seen a sharp uplift.”
Discount stores such as JB Hi Fi will benefit in the short term, Tony Wilson, an analyst at Evans & Partners Pty. said.
Target who has moved to sell low cost consumer electronic goods via 301 outlets, put in its best performance in over two years. Sales at stores open at least 12 months rose 4.5 percent from a year earlier, Wesfarmers said.
Bloomberg spoke to economist Tom Kennedy from JPMorgan Chase, who believes Australia’s performance illustrates its good fortune in having interest rates high enough for central bankers to stimulate the economy through conventional means.
Households have also benefited from a 10 percent fall in petrol prices since mid-May and stimulus money as a rebate against the carbon levy introduced July 1, said George Tharenou, a senior economist at UBS AG.
Woolworths this week posted fourth-quarter sales growth that came in at more than double analyst estimates.
At Big W, the carbon rebates seem to have stoked sales of Apple’s iPad to lower-income customers, the division’s director, Julie Coates, said. During the past six months Big W has had some of the lowest prices for Apple products.
Groups most affected by the stimulus money seem to have been spurring sales at some branches of Harvey Norman, Australia’s largest electrical goods company, co-founder and chairman Gerry Harvey said.
“If you give a whole heap of money to people earning under A$100,000 you’ll get the benefit in those areas,” Harvey he added.
