Australian retailers are calling on the Reserve Bank to urgently cut interest rates as inflation slows and businesses struggle with high cost-of-trading.

Governor Michele Bullock held interest rates at 4.35 per cent this month, citing slowed economic growth and inflation holding steady at 3.4 per cent over the year to January.

National Retail Association Director Rob Godwin said weakening household consumption and high labour costs spell uncertainty for retailers who have had to keep up with business expenses by spending out-of-pocket.

“January sales outpaced the December Christmas trading period by 1.1 per cent, as revealed by the Australian Bureau of Statistics, indicating how poor retail’s peak sales season performed,” Mr Godwin said.

“While demand is high, middle Australia, the target market for most retailers, is under immense economic pressure from the excessive 13 interest rates rises.

“As consumers continue to tighten their purse strings retailers have had to slash orders for new stock to avoid losing money on excess inventory.

“If the Reserve Bank leaves cutting interest rates to 2025, we would risk losing current and potential investors into Australia, which means we will see a higher-than-usual number of retail businesses exit the market.

The Reserve Bank has not ruled out future increases to interest rates, citing elevated services inflation and its determination to return overall inflation to its target range of 2-3 per cent.

“Retailers are reliant on the Reserve Bank to improve consumer spending and enhance investor sentiment so Australia’s retail landscape can continue to grow,” he said.

“We need more than a hold on current rates, we need the Reserve Bank to consider the high cost-of-trading business owners have to face every day as a consequence of costly policy decisions.”


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.