Retailers welcome the Reserve Bank of Australia’s (RBA) announcement today of a 25-basis-point cut to take the cash rate to 3.6 percent as a vital confidence boost for their sector’s recovery.
The Australian Retailers Association (ARA) and National Retail Association (NRA) said lower interest rates will encourage much-needed discretionary spending.
“While the interest rate cuts have taken time to land, every reduction helps nudge us towards a brighter outlook for retail,” said ARA Chief Executive Officer Chris Rodwell. “This rate cut will help bolster confidence in the lead-in to the peak season.”
“There are two clear messages that stem from this decision. First, given retail growth and consumer confidence remain subdued, it’s vital the RBA remain open to further cuts in 2025. Second, it’s critical the banks act now to pass on the full rate cut.
“With one-in-ten Australians employed in retail, we need our $430 billion sector to lift. A stronger Australian economic trajectory can’t happen without a retail recovery.
“Interest rates are only part of the story. Retailers have been battling higher costs of doing business across the board – rents have spiked, we’ve seen significant wage rises, along with higher energy, insurance and supply chain costs and unfortunately an intense retail crime wave.
“Global competition is well and truly on our doorstep with ultra-low-cost digital retailers like Temu and Shein scooping up an enormous share of local spending, without being held accountable to the same standards as our local retailers.
“On top of these challenges, businesses are tied up in regulatory reform, navigating the biggest set of workplace changes in decades. Many small businesses simply don’t have the resources to cope.
“That’s why Australia needs to see a bold agenda on productivity and red-tape reduction. It’s vital we remove barriers to growth and strengthen the resilience of our local retailers who contribute almost one fifth of our national gross domestic product.
“Retail plays a critical role in employment, providing jobs for 1.4 million Australians. As the country’s largest private sector employer, retailers need confidence to invest in their businesses in the months ahead,” he said.
“We stand ready to support the Federal Government with its productivity and economic reform agenda. And we urge the RBA to stay vigilant to opportunities to provide further relief and help ignite the economic recovery Australians so desperately need,” said Mr Rodwell.