Home topics news Source: Atom on Unsplash News News Australian businesses hit by the ‘double whammy’ of rising costs and falling demand Yajush Gupta March 2, 2023 During the reporting season, valuable insights were gained into Australian businesses’ outlook on the stock exchange. While the majority of retailers reported strong earnings in the second half of 2022, their sales projections for the upcoming year were more subdued. Several companies downgraded their sales projections for various categories and emphasised caution. “Groups like Adairs, JB HiFi and Baby Bunting all highlighted that sales in the year ahead in many categories are likely to be lower. This year we will see the impact of many more consumers having less to spend each month, as up to 800,000 fixed-rate loans on very low-interest rates will convert to variable-rate loans. “We will also see the added impact of housing completions begin to trend down from about the middle of the year. This will affect sales in the furniture, white goods, and electrical goods categories,” Anneke Thompson, Chief Economist, CreditorWatch, said. In the year ahead, retailers are expected to face challenges as many consumers will have less disposable income due to up to 800,000 fixed-rate loans converting to variable-rate loans, resulting in higher interest rates and reduced spending power. Furthermore, the furniture, white goods, and electrical goods categories are likely to be affected by a decline in housing completions from mid-year onwards. These factors are expected to create headwinds for retailers, negatively impacting their sales and