Australian retailers are urging the Reserve Bank to rein in interest rates after it increased rates by 25 basis points, putting the cash rate at 4.35 per cent.
National Retail Association Director Rob Godwin said retailers were hopeful the RBA would hold the cash rate at 4.1 per cent, but are now reeling from today’s decision.
“Retailers and consumers feel they’ve been backing the wrong horse as the Reserve Bank looks to take even more money out of our pockets ahead of the biggest sales period of the year,” Mr Godwin said.
“Business owners have been betting on an unrestricted Christmas trading period to ensure the future of their ventures as they battle rising insurance, supply chain, labour and rental costs.
“Presumably, the Reserve Bank increased interest rates to put a spike in the 0.9 per cent month-on-month sales increase in September, as revealed by the Australian Bureau of Statistics [ABS] last month.
“However, according to the ABS, retail sales volumes are down 1.7 per cent compared to the September quarter last year, proving the 12 previous consecutive rate hikes have been more than effective at curbing consumer spending.
“It begs the question, does the RBA see stunting retail growth as the only solution to easing high inflation even though consumer spending isn’t a key contributing factor?
“Taking money out of the pockets of business owners every time retailers experience a small win isn’t a fair solution to the rising cost of living.
“Retailers are banking on the small sales wins through the year so they can adequately prepare for the Christmas sales period,” he said.
Consumer sentiment has slightly risen after the RBA held rates for the fourth consecutive month, but now customers will be forced to pull back on their spending.
“The productivity of our sector depends on positive consumer sentiment and so does the business confidence of our retailers,” he said.
“The National Retail Association urges the RBA to hold interest rates in December or risk being branded the Grinch who stole Christmas by retailers and consumers alike.
The National 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.
For more information, contact the National Retail Association media unit on 0467 792 013.