The Australian Retailers Association (ARA) said the Reserve Bank of Australia’s (RBA) decision today to hold the cash rate at 4.35% is a missed opportunity to support households and businesses who are doing it tough in the lead up to Christmas.
ARA Chief Executive Officer Paul Zahra says retailers continue to battle the dual headwinds of slow spending coupled with higher costs of doing business.
“With CPI at its lowest rate in more than three years, it’s time for the RBA to reduce the pressure on households and businesses by lowering the current cash rate,” Mr Zahra said.
“Small businesses are particularly vulnerable, with ongoing pressure from many directions including higher business costs across the board.”
Mr Zahra says with peak season in full swing, a rate cut would have given retailers much-needed confidence as they look towards Christmas and the New Year.
“Many retailers have been investing heavily in Christmas and the holiday season, including additional staff, new product lines and festive store fitouts.
“We’re seeing changing shopping habits from Australians as they continue to combat the cost-of-living crisis.
“A record number of shoppers are expected to turn to the Black Friday/Cyber Monday sales to buy Christmas presents to make their household budgets stretch further.
“Given the challenges experienced by the sector this year, retailers will be hoping to see sustained spending beyond that final weekend of November.
“Discretionary retailers make up to two-thirds of their profits in the all-important Christmas trading period hence, it is critical to do well enough to be able to sustain the winter months. Retailers employ tens of thousands of additional casual staff over the peak season providing many with the opportunity to earn additional income,” said Mr Zahra.
Mr Zahra said the ARA will continue to advocate for relief measures from the Federal Government.
“We need urgent action to ensure Australia’s $430 billion retail economy not only survives but thrives.”
“It’s essential that retailers, both small and large, have the confidence to continue investing in their businesses over the coming months.”
