Retailers expect to miss out on rate cut money
MAC McGauley, of Nimbin, was out shopping with his daughters, Keera, 5, and Ruby, 3, yesterday, undeterred by the economic crisis.
“I haven't really been affected by it,” he said.
Mr McGauley said he would still be making major purchases, despite the downturn.
However, while Tuesday's 75-point rate cut might help people struggling with their mortgages, Lismore Chandlers store manager Michael Haddin said the worst impact of the economic crisis on the retail sector was yet to come.
Mr Haddin said the lower Aussie dollar would have a huge impact on retail prices.
“At the moment most goods on the floor were bought when the dollar was worth 98 cents,” Mr Haddin said.
“From now on imports will be purchased with a dollar worth 64 cents.”
Mr Haddin said they were also trying to draw customers in from other areas.
“When times are tight you need to advertise more and put yourself out there,” he said.
Ballina Chamber of Commerce project officer Kim Potter said retailers were suffering.
“People are worrying about spending and that is having an impact,” she said.
Mrs Potter said she doubted Tuesday's rate cut would have much impact on the retail sector.
“It will be interesting to see how people spend the extra money,” she said.
“I think they might use it to get out of debt.”
Mrs Potter said retailers had to become more innovative in order to survive.
“We are seeing retailers go online to expand their sales, as well as keeping their shopfronts,” Mrs Potter said.
“There is still a lot of optimism in the retail sector.”
Assuming a new home loan rate of 7.5 per cent after Tuesday's 75 basis point rate cut; a family with an average $300,000 mortgage will have their monthly repayments reduced to $2236.52, delivering a saving of $148.91.