The RBA announced a significant 50 basis point rate cut in official interest rates this week and you would expect a joyous reaction from consumers but has the reverse happened?
This is purely anecdotal but reports from traders this week indicate an unusually poor sales week, at least up to the time of writing (close of business on Saturday). Even more anecdotal, is your editor’s experience on the way home from the market when he called into Safeways at the normal time (purely for non-market products of course) and for the first time in memory was the only person using the 8 bay auto checkout. Then we visited the service station (normally a queue to the door at the time we drive home) and not one person in the payment queue.
Have consumers said “Holy crap! They’ve reduced rates by 50 points. We must be in serious trouble”. Add in the State Budget (always unpopular) and the looming Federal Budget (even more unpopular) plus far too many high profile job losses in Victoria and you have all the ingredients for a loss of consumer confidence. Or is this just another one of those crazy excuses we traders seem to excel in. Let's hope Sunday's trade makes a difference.