Retailers have urged the Reserve Bank to wake up and change direction following its decision to increase interest rates by 25 basis points today, lifting the cash rate to 4.1 per cent.
Less than a week since the announcement that wages will increase by 5.75% come July, the National Retail Association CEO Greg Griffith said the country’s business owners needed a break to assess the latest economic impacts before another interest rate rise.
“The implications of a twelfth interest rate rise and a significant award wage increase will hit retailers hard,” Mr Griffith said.
“In just a few months the sector has been hit with a wage and superannuation guarantee increase, staffing and resourcing issues, high inflation and cost of living causing flatlining consumer confidence and spending,” Mr Griffith said.
“The cost of doing business is already unfeasible, and the decision to increase rates for the twelfth consecutive time could force many retailers to shut down.”
Mr Griffith said the imminent fall in consumer spending from this decision coupled with the increase in wages means any hope of survival for some retailers will depend on shedding labour costs.
“This is a challenge for businesses of all sizes, but particularly our small and medium enterprises. It will really put their viability to test when we see pay packets rise faster than sales,” Mr Griffith said.
“Paying more on interest rates and more on wages means some businesses will have to figure out if they can keep going, all the while not knowing which blow they will cop next.
“What both retailers and consumers need right now is stability.”
The National Retail Association is the voice of modern retail, representing 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, please phone the NRA media unit on 0467 792 013.