Australia Retailers See Further Price Reductions in 2013

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By Esther Tanquintic-Misa | January 8, 2013 4:56 PM EST

Australian shoppers on the lookout for great, massive bargain finds may well ought to splurge these first few months of 2013 as retail businesses prepare to further slash already discounted items for sale just to be able to overcome the sector's burgeoning sales slump and somehow boost profit.

A survey by credit information and debt collecting firm Dun & Bradstreet of 1,200 business owners and senior managers in Australia's retail, wholesale and manufacturing sectors revealed shoppers could expect further price reductions on items sold on the rack.

To encourage spending, businesses will be forced to further discount their already discounted sale prices, Danielle Woods, D&B director of corporate affairs, said.

"We know that there is traditionally a drop off in spending following the Christmas period as consumers play catch-up with their household budgets and debts following an often expensive holiday period," she said. 

"These findings suggest that businesses are planning to negotiate the spending slump by extending discounting through the New Year and by managing their stock carefully."

"Although the most recent data has taken selling price expectations to a new low, it is part of a long downward trend that suggests ongoing discounting has become the new normal," Ms Woods said.

Moreover, businesses will also steer in to remain profitable by reducing their spending costs, which could mean a difficult time for job seekers wanting to dip their hands in the concerned sectors.

"There's certainly a flat trend in terms of employment," Ms Woods said.

"What we're seeing for the March quarter is only 7 per cent of firms are actually expecting to take on more staff than they had at the same time last year."

Although the selling price expectations of businesses have been below the ten-year average since 2009, the concerned sectors remain optimistic the adjustments they will make on their selling prices as well as cost-cutting costs will boost somehow their margins.

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