Retailers expect to slash jobs over economic uncertainty

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Retailers expect to slash jobs over economic uncertainty

Retailers are cautious about this year’s Christmas sales and expect significant staff cuts due to the world economic uncertainty.

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Retailers are cautious about this year’s Christmas sales and expect significant staff cuts due to the world economic uncertainty.

The Dun & Bradstreet Business Expectations Survey (released today) said firms are keeping expectations for the holiday period firmly in check, with more than 50% of firms anticipating demand to slow over the next 12 months.

Dun & Bradstreet’s CEO, Christine Christian, said the December projections are significantly below where they were at this time last year.

‘It’s clear that global economic uncertainty is affecting the confidence of business and consumers alike with knock-on effects for anticipated sales, profit and employment growth,’ Christian said.

Significant staff reductions
 
The Business Expectations Survey shows that for the upcoming December quarter employment expectations have recovered from the first negative index in two years but are still seven points below last year, with significant staff reductions expected in the retail sector.

‘Negative outlook among retailers is a reflection of the industry’s actual performance in the June quarter,’ Christian said.

‘Significant declines were recorded in the second quarter across sales (–3) and profits (–10), forcing stores to shed employees (–2).’

Slash staff

‘This is anticipated to continue through December, with profits trending down and prompting retailers to slash staff numbers over what should be a period of peak productivity.’

‘Australian consumers are now saving at levels not seen since the 1980s. Retailers, not surprisingly, are experiencing one of their worst years. Retailers seem to have given up hope that conditions will improve this side of Christmas.’

‘There is an acute awareness in the industry that retailers cannot count on the usual flurry of Christmas spending to push them over the line, as they might have done in the past.’

Kick start

‘This is a real concern for many businesses as Christmas is such a key time for discretionary spending and most rely on the period to kick start them into the New Year.’

The survey shows 21% of firms expect wages growth to be the primary influence on operations — down four percentage points from last month.
 
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