Recent results posted by retailers during the ASX reporting season, coupled with the latest ABS data on retail spending would tend to indicate a rosy future for shopkeepers. Analysts are saying that retail is one of the three boom sectors on the ASX this year (along with banks and miners).

But three clouds are appearing on the retail horizon.

The first cloud is the looming federal election. Every retailer knows that an election campaign dampens retail spending, yet no-one can explain why this should be so.

To a large extent it defies logic. Whether the coalition or Labor occupies the Treasury benches makes very little difference to the spending power of the average Joe and Judy. Yet every election, state or federal, that I have experienced in thirty years in and around the retail sector has had negative effects.

While John Howard may want to delay the election while the polls are trending gloomy, retailers will want a short campaign and an early date. December elections are a retail nasty.

The second factor is the threat of another hike in interest rates. Again, timing is important. If it is to happen, it is preferable before December. When the RBA lifts rates, there is a reaction among shoppers. For a short time they pull their collective heads in and stop spending. It doesn’t last too long, but it does knock retailers around for a period.

Strike three is a virus. Equine Influenza is inching south toward the Melbourne Spring Racing Carnival.

Optimists are saying that infections have not crossed the border into Victoria. However, with horses reported infected in Albury, the virus is now closer to Melbourne than Sydney.

As a Melbourne person, I understand the impact and importance of the festival of the hoof on the local apparel retailers, the tourism and hospitality sectors and the huge spin off into the broader economy. When I lived in Sydney for a few years, I was amazed how big the Melbourne Cup is in the emerald city – almost as big as in Melbourne. I can only assume that other states feel similar effects.

The prospect of an election called after APEC for a poll in mid to late October, followed by an abandoned racing carnival followed by a post poll interest hike keeps retailers awake at night.