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Fall in petrol prices is a timely help

Media release

Newmarket Business Association

Sunday 19 October 2008

Fall in petrol prices is a timely help to the country's retailers

The latest fall in petrol prices is great for the country's retailers as it means more discretionary dollars in every household budget. It is a small break during what is a lot of economic bad weather," says the head of Auckland's leading retail district, Cameron Brewer, general manager of the Newmarket Business Association.

"The eight cent drop means petrol is almost 40c cheaper than at its peak in July. That is significant. Let's not forget that this boost to the back-pocket comes on top of the 1 October tax cuts worth up to $28 a week. What's more the Reserve Bank is expected to cut interest rates in a few days time."

Reserve Bank Governor Dr Bollard is expected to cut interest rates possibly as much as one percent when he announces the Official Cash Rate on Thursday morning.

"Household budgets have been really squeezed over the past few months with the likes of food and energy costs going through the roof. Cheaper petrol, cheaper mortgages, and more take home pay are significant things that have come at a welcome time for householders.

"With just over nine weeks until Christmas any good news is great news for retailers. However let's not forget that given the global economic slowdown, consumers aren't parting with their money so readily. So while this is positive, the jury is actually out on whether this will be enough to demonstrably lift retail spending figures," says Mr Brewer.

ENDS

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