In a market full of motorists and mortgage holders, Canberra retailers have missed out on the flow-on benefits of lower petrol prices and interest rates, judging by the latest figures for shopping turnover for January.
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The ACT recorded a 1.9 per cent fall (seasonally adjusted) in retail trading, the biggest decline in all states and territories across Australia.
In trend terms the ACT remained unchanged in January, while Queensland (0.4 per cent), Western Australia (0.4 per cent), NSW (0.1 per cent), South Australia (0.3 per cent), Tasmania (0.1 per cent) and the Northern Territory (0.1 per cent) all rose.
Canberra Business Chamber chief executive officer Chris Faulks said as well as public sector uncertainty and on-line trading, big discounters at Majura Park such as Costco were hurting retailers. The opening of flatpack furniture giant Ikea would add to the competition in a market which had the biggest amount of floor space per head of population in the country.
"Fyshwick in particular is suffering," Ms Faulks said. "The plus side of those [big box retailers] is from the region they are able to attract a much larger number of people who come to Canberra to shop."
Ikea would have the drawing power to bring people from the Southern Highlands, the South Coast and west from places like Wagga and Albury.
"So there are pluses as we go through this change in retail, but also minuses in that the more retail space you have, particularly of that sort, the more it impacts on other retail businesses in Canberra," Ms Faulks said.
All indicators continued to point to a fragile economy in the ACT, Ms Faulks said. An increase in house prices was a rare glimmer of good news. But hyperbole about retail figures rising over Christmas proved to be of little substance when hard figures from that period arrived.
Other states had experienced increases in demand flowing on from lower petrol prices and interest rates, but not the ACT.
"We seem to be increasingly in the league of Tasmania, South Australia and other economies that are not doing that well, which is a concern, given it was only a year or 18 months ago that we were regarded by the [Commonwealth Securities] State of the States [report] as one of the strongest economies in Australia," she said.
'We have had the biggest drop in sales, seasonally adjusted, that indicates the continuing uncertainty in the ACT economy around jobs and the political instability which impacts heavily in Canberra, because we are so close to it."
Ms Faulks said that uncertainty translated to uncertainty about whether people were going to have jobs in the public sector, which flowed through to a lack of consumer confidence, which meant people didn't spend.
"Members of Canberra Business Chamber and broader business community are asking the federal government for certainty and stability which underpin consumer confidence and business confidence and investment," Ms Faulks said.
Canberra's retailers had experienced structural adjustment for some time, caused by the digital economy and exponential growth in on-line sales which often offered cheaper products and customer service which was frequently exceptional.
"Feedback from our members are that a lot of the businesses in Canberra are in a holding pattern; they are just holding on really, hoping this cycle, particularly with the federal government, will move on," Ms Faulks said.
"It is not dissimilar to 1996 and at the end of it, after a period of constraint, the federal government started spending again and the ACT benefited from that," she said.
