Retail giant Woolworths doesn’t expect Australians to spend any less at its stores in the wake of this year’s tough federal budget.
Retail groups and economists have warned of a possible hit to consumer sentiment following the May 13 budget, which is expected to contain spending cuts and tax hikes as part of the Abbott government’s efforts to return to surplus.
But Woolworths boss Grant O’Brien does not expect the budget to affect consumer behaviour.
“Generally you can set your clock by a new government coming in and having a tough budget,” he told reporters on Wednesday.
“So I don’t see any great surprises and I don’t see any great change in consumer behaviour as a result.”
He said the retailer had been dealing with subdued consumer confidence for several years but expected sentiment to improve as memories of the global financial crisis faded.
Mr O’Brien was speaking after Woolworths announced it lifted its sales 5.3 per cent to $15.2 billion during the March quarter.
His comments echo those from rival Wesfarmers, which owns Coles, Bunnings, Officeworks, Target and Kmart, on Tuesday.
Chief executive Richard Goyder said the company’s retail businesses were well positioned to withstand a slide in confidence.
“In a sense that’s an opportunity for us, I think it plays into our strength, which is providing great value for our customers,” he told reporters.
“One of the things that attracted us to Coles was the fact that through different phases of an economic cycle the food business is pretty resilient.”
He also backed the government’s efforts to reduce debt.