Retailers have urged the Reserve Bank to show restraint at their make-or-break monetary policy board meeting in August, following a positive June retail trade result.
The Australian Bureau of Statistics (ABS) revealed today that June retail trade rose by 0.5 per cent from May and by 2.9 per cent year on year, thanks to extensive end-of-financial-year bargains.
The ³Ô¹ÏÍøÕ¾ Retail Association (NRA) Interim CEO, Lindsay Carroll, said that the boost in June is bittersweet as retail business owners will now be anxiously awaiting the Reserve Bank’s decision in August.
“The ABS reported that the Consumer Price Index grew to 3.8 per cent in the June quarter, and while housing prices seem to be the biggest contributor, the Reserve Bank’s one-size-fits-all solution will inevitably only punish retailers and consumers,” Ms Carroll said.
“If the Reserve Bank decides to raise interest rates at its next meeting, it would at a minimum sabotage Black Friday sales in November and, at worst, potentially trigger a sector-wide recession in retail.
“Retailers depend on the holiday trading period to sustain them through the following year’s quieter months, like January and February. With retail trade insolvency appointments increased by 42.2 per cent to 768, as revealed by ASIC, they need those sales more than ever,” she said.
According to the ABS, June’s positive trade result was driven by discretionary spending at household goods retailing (+1.1%), department stores (+1.0%), and personal accessory retailing (+0.7%).
“We are in a cost-of-living crisis, which has caused a cost-of-trading crisis, so bargains are the only opportunity for Australians to spend on household goods and clothing,” she said.
“We urge the Reserve Bank to allow retailers to keep more of what they earn. Increasing interest rates in August would be detrimental to Australian businesses and blunt retail’s biggest trading season.
“Policymakers should shift their attention to the true contributors to inflation, such as housing. Retail businesses are a critical part of our nation’s economy and more should be done to support the sector.”
The ³Ô¹ÏÍøÕ¾ Retail Association represents more than 60,000 stores across Australia. It has been serving businesses in the retail and fast-food sectors for close to 100 years.
