By Claire Reilly
SYDNEY, NSW: One of the key industry bodies representing the interests of retailers, the Australian Retailers Association, has called on the Reserve Bank of Australia to consider the current weakness of the retail market and hold interest rates.
Russell Zimmerman, the Executive Director of the ARA, said the industry was struggling and that retail trade figures for the month of June (due to be released this Wednesday) would highlight just how slow the mid-year sales period has been.
“The retail sector has failed to post any healthy growth now for the last two years and in more recent times consumer reluctance to spend has been heightened further by the uncertainty around how the carbon tax will affect household budgets,” said Zimmerman.
“With global economic concerns feeding into consumer sentiment and the cost of living on the rise, consumers fearing another economic crisis are saving at record levels and the retail industry is feeling the brunt of a lack of discretionary spending.
Click here to sign up for our FREE daily newsletter
With the RBA set to make a decision on interest rates tomorrow, the ARA was calling for it to make “the only sensible decision” and keep them on hold in the interests of the retail industry and “spooked consumers”.
“Australians will be unable to factor an interest rate increase into their already stretched budgets and recent announcements of shop closures show retailers won’t cope with a further exodus from their shop fronts.
“The retail industry is simply not in a position to see any more money drained from consumer pockets as a result of an interest rate rise,” Zimmerman said.
While the Reserve Bank has not announced its plans for interest rates, the governor of the RBA Glenn Stevens spoke in an address to the Anika Foundation in Sydney last week, conceding that retailers were doing it tough.
“In per capita terms, real consumption today is no higher than three years ago,” said Stevens. “It’s no wonder that people are talking about consumer caution, and no wonder that retailers are finding things very tough indeed.”