The Australian Retailers Association has warned that if there is a fourth consecutive RBA rate rise in February, retailers will suffer as much needed growth in consumer spending will be halted.
Russel Zimmerman, executive director of the ARA, said that a possible interest rate rise is badly timed and fails to acknowledge February as the toughest month for consumers and retailers.
“As well as dealing with last year’s interest rate hikes, families will be experiencing traditional February financial strain of credit card bills from the festive season and back to school costs. The RBA must allow consumers time to recoup some expenses before implementing yet another rate rise,” he said.
“Retailers will be hit doubly hard from a February rate rise as they juggle staff numbers to cope with increased wage bills in compliance of the recently implemented modern retail award.”
Zimmerman highlighted that the retail industry is still yet to feel the full force of the past three interest rate hikes.
“Retailers call on the RBA to be patient as the full impact of any interest rate changes take three to six months to hit the retail sector. The impact of last year’s interest rate rises will still be flowing through to the retail sector until at least March,” he said.
“Retail trade has been very patchy for the past twelve months and this trend will continue unless the RBA gives retailers a fair go at getting back onto their feet through solid, consistent growth, outside of the traditionally higher trading figures of the festive season.”
Zimmerman urged the RBA to hold off on any further rate rises.
“Once again, the ARA is calling on the RBA to delay any further rate rises and to fully gather all information on past retail trade figures before making any adjustments that are degenerative to retailers and consumers alike,” he said.
“By taking more cash away from consumers and retailers in February and pushing them into a corner, the RBA is burning the chances of consistent economic recovery.”