Retailers are urging the Reserve Bank (RBA) to gift a Christmas rate cut to shoppers at its last meeting of the year.
Today, the RBA once again held rates, but consumers and retailers are waiting for Martin Place to make good on its promise that it would consider cutting rates when inflation reached the targeted 2-3 percent.
According to the Australian Bureau of Statistics (ABS), Australia’s headline inflation sank to its lowest level (2.8%) in more than three years in the September quarter.
³Ô¹ÏÍøÕ¾ Retail Association (NRA) Interim CEO Lindsay Carroll said the sector has been wounded by historically sluggish sales in the last couple of years and is in dire need of relief.
“The Christmas trading period couldn’t be a better time for the rate cuts and now that the Reserve Bank has achieved its goal, it’s time for relief,” Ms. Carroll said.
“In September, we saw most parts of retail go backwards and this will likely be the case with the October trading period as consumers save up ahead of the holiday trading season.
“Discretionary item retailers have taken the biggest hit to sales since interest rates went up and they’ve been on the backfoot ever since.
“A number of these businesses have gone into administration in the last two years and a rate cut before the year is out could restore some of that lost confidence.
“Inflation has at long last dropped to within the prescribed range of the RBA. We think it therefore entirely justifiable that the RBA takes a serious look at a long-awaited cut to the official interest rate.
“The Christmas trade period is crucial every year to retail, but with the current cost-of-living crisis, it will take on greater importance for the sector this year.
“If the Reserve Bank keeps its word, and hopefully cuts rates in December, it could boost consumer spending and thereby greatly help retailers, making up for their shock interest rate decision in November,” she said.
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.
