the credit multipliers are now in reverse.

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    Last week's figures showing that retail sales fell 0.1 per cent in February were well short of the 0.3 per cent rise that economic tipsters had predicted.

    Commentary in recent weeks from executives at David Jones, Myer and Harris Scarfe has all pointed the same way.

    The sense that things are flattening out, at best, was confirmed yesterday by a lower than expected rise in building approvals of only 0.1 per cent in February. Fewer homes, less furniture, more retail pain.

    The downturn, and yes, folks, despite the desperate optimism of the fading few, it is a downturn, means it is not a particularly fabulous time to be in retail.

    This has been exacerbated by having the developed world's highest interest rates.

    This means that consumers surviving on credit cards -- and there are plenty out there with five or six of the things to feed the stupendous credit binge of the past half decade -- are getting bigger bills to go along with their bigger mortgages.

    The latest interest rate rise appears to have been the tipping point. In theory, it's a bit like the rack -- just a little more and more, until suddenly something gives. And it has.

    This has brought quite a sharp slowdown in discretionary items. Spending on food is also starting to slow, so expect the big chains to start suffering over the next few months.

    The next victims of the downturn and fading retail performance will be the media companies, such as The Australian's owner News Limited, along with Fairfax and PBL Media, which rely on advertising. Some belts are already being tightened.

    Although this may be small solace, Lachlan Murdoch may not be completely unhappy with the way things panned out. His $3.3 billion bid with James Packer to privatise Consolidated Media was a victim of the credit crunch.

    But the downturn is already repricing media assets and there may be more to come. Murdoch may just yet find a better bargain later in the year.

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