Aussie retailers shed staff, but remain optimistic

43 per cent of Australian retailers surveyed said they remained worried about the state of the economy.

CANBERRA - Retailers have been forced to lay off staff over the past three months as the global recession hit hard in Australia, but they are confident things are about to pick up, new figures show.

According to the Australian Retailers Association's latest index, some 23 per cent of businesses had to sack employees in the three months to March, with just 11 per cent adding staff.

That resulting negative 12 per cent balance was a dramatic 20 percentage points lower than the net December quarter figure.

But it's not all bad news.

Looking forward, 11 per cent of Aussie retailers expect to increase staffing levels in the current quarter, while just eight per cent expect more sackings, resulting in a positive three per cent balance.

"Usually, employment costs are the easiest overhead for managers under pressure to cut, but SME (small and medium enterprise) retailers are showing responsible understanding of the importance of holding onto staff to stimulate consumer spending and economic recovery," association executive director Richard Evans said in a statement.

"We're urging employers right through the supply channels to hold onto their staff who have the key to economic recovery in their pockets."

Evans said if unemployment remained below six per cent, the retail sector could expect to see improved growth by the September quarter.

But the retail index shows confidence is currently very low.

Confidence fell nine percentage points over the three months to March, taking it to negative six per cent overall.

Some 43 per cent of businesses were worried, 37 per cent were confident and 17 per cent were neutral.

"The economic issues most likely to be causing problems for retail SMEs were the level of the Australian dollar, the lack of consumer confidence and the economic climate in general," the index report, released on Monday, states.

- AAP