Retailers bemoan RBA's Scrooge on pre-Christmas rate cut

The Australian Retailers Association (ARA) has not received its desired early Christmas present of a rate cut by the Reserve Bank of Australia (RBA) today. The ARA took the RBA's decision to leave the cash rate unchanged at 4.75 percent as a blow for retailers as they try and put the woes of last Christmas behind them, prepare for the busiest time of the year and adjust their staffing levels accordingly.

 

ARA executive director Russell Zimmerman said the six weeks over the Christmas and New Year trading period are critical for the sector given that up to 40 percent of a retailer’s yearly earnings can be made around this time.

“I am disappointed the RBA did not reduce the cash rate," Mr Zommerman said.

"Retailers are wondering when they will be able to enjoy some Christmas cheer after hearing the RBA has maintained the strain on consumers’ wallets as they struggle to find any discretionary spend in their stretched household budgets.

“As Australia’s largest employer, retailers would usually be looking at putting some Christmas casuals on the roster in readiness for the festive season. Retailers facing a bad year of trade and bad memories of last Christmas will be forced to employ less staff.

“We are also fast approaching the Spring Racing Carnival, which traditionally delivers a bit of a boost for fashion retailers. After a dismal winter sales period, businesses in this category are hoping for some respite.

“We believe an interest rate cut would have been an obvious decision as consumers are clearly struggling to cope with mortgage stress and are tightening their belts as they react to uncertainty in the world economy.

“The RBA has to form a delicate balance between sectors posting different levels of growth as well as manage inflation levels, but we believe today’s decision to maintain the cash rate will be detrimental to the retail sector and will certainty affect employment levels,” Mr Zimmerman said.

www.retail.org.au

 

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