Retailers left wondering - at an opportune time to support stronger retail sales, why another rate stay?

PEAK retail industry body the Australian Retailers Association (ARA) said the Reserve Bank of Australia’s (RBA) decision to keep the cash rate on hold at 2.5 percent does little to support the current upswing in retail sales.

ARA Executive Director Russell Zimmerman said that despite an uplift in the previous months retail sales figures, consumer confidence remains extremely fragile.

“Lowering interest rates today would have been a supportive step in the right direction for the retail sector but unfortunately this wasn’t the reality.

“Given the government still needs to pull money out of the economy to balance the budget, retailers believe the RBA will need to continue to support the economy via low interest rates for some time.

“We’re also aware that Australians are struggling to save at present. According to the latest Banking Day Report, only 46 percent of households said they were able to save each month – down from 49 percent in December and the lowest level since ME Bank started the survey in 2011.

“Although the retail sector finished the 2013-14 financial year on a relatively strong note, (recovering somewhat in June from the post-Federal Budget downturn), the reality is that this activity will be short lived.

“Consumer confidence often shows a dip in sales between August and October and it is now imperative that the Federal Government do all that it can to ensure that retail trade does not suffer as we gear up toward the spring/summer racing season and also the Christmas trading period.

“The ARA urges the RBA to lower interest rates at their next meeting in September in order to aid retail growth, especially for the SME sector,” Mr Zimmerman said.

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Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $265 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia.

Visit www.retail.org.au or call 1300 368 041.

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