Latest trade figures reveal the series of interest rate rises by the Reserve Bank have nipped Christmas sales in the bud, risking the future of Australian retailers.

Figures released today by the Australian Bureau of Statistics (ABS) reveal spending in December grew by just 0.8 per cent compared with last year and fell by 2.7 per cent compared to last month.

National Retail Association Director Rob Godwin said the disappointing holiday sales season and cost-of-living pressures have forced retailers of all sizes to either let go of staff or close-up shop.

“The parched figures show that consumers had no money left to spend after Black Friday and Cyber Monday sales,” Mr Godwin said.

“The RBAs decision to raise interest rates in November was a step too far in beating down spending, giving retailers little hope for December sales after November’s flat result.

“Now that spending has all but stopped, we ask that they start cutting interest rates at their monetary policy meeting next week,” he said.

These figures come after a revised rise of 1.6 per cent in November, which was initially a 2.0 per cent increase month-on-month. Overall, the festive sales season has been a major loss for retailers.

“Discretionary items were hit the hardest as department stores and clothing, footwear and personal accessory retailing fell by 8.1 per cent and 5.7 per cent, respectively,” he said.

“Turnover for food-related industries in cafes, restaurants and takeaway food services fell as predicted by 1.1 per cent, with Aussies going on overseas trips and unhealthy weather keeping people indoors.

“Nevertheless, food retailing was the only industry to experience an increase in sales, by 0.1 per cent. However, population growth and inflation mean this is a decline in real terms.

“The ACT and WA experienced the largest decline in retail sales of 3.8 per cent, followed by Victoria at 3.2 per cent. Queensland experienced a decline of 2.3 per cent.

“While the proposed stage three tax cuts may put more money in Aussie pockets, this is likely to be soaked up in high interest rates anyway.

“It’s time for the Reserve Bank to cut back on interest rates so the retail economy can recover from the scarce spending in the festive season.”

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, phone the National Retail Association media unit on 0467 792 013.