THE retail sector is still strong despite uncertainty in financial markets and rising interest rates according to the head of Australia's largest retailer.
"Retailing, generally, seems to be still reasonably strong, certainly in our business," said Woolworths chief executive Michael Luscombe yesterday.
"The trends through last year seem to be continuing.
"The only cloud on the horizon will be possibly what effect on discretionary spending a further interest rate increase and prolonged high petrol prices may have, that's a bit of a crystal ball.
"Typically, when we've reached that in the past, there has been a period when people tighten their belts. So I guess we'll wait and see on that."
The Reserve Bank of Australia could lift interest rates next month, after raising the official cash rate to 6.75 per cent in November.
Woolworths shares closed up 28c to $31.03, even though the share market fell by almost 3 per cent yesterday.
Asked if tighter credit conditions were affecting the Australian retail sector, Mr Luscombe said while he could not speak for others "certainly, it's not going to affect Woolworths".
"Others may have large debt that they need to refinance," he said.
"Obviously they may have to pay a little bit more for that debt. That's not something we're facing."