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PEAK retail industry body the Australian Retailers Association (ARA) says the Reserve Bank of Australia’s (RBA) decision to leave the cash rate unchanged at 4.75 percent was a ‘job well done’.
It comes as retailers continue to operate in the slowest gear of a multi- speed economy and May ABS retail trade figures that show a decline in sales across the sector.
ARA executive director Russell Zimmerman welcomed the news.
“Already wary consumers pulled back on their spending in a big way throughout May, confirming retailers’ fears that the slight growth in April was only temporary and not a realistic reflection of the pressure being felt in the sector,” he says.
“Anecdotal evidence of weaker than usual midyear sales further shows any interest rate rise would have been disastrous for retailers. The RBA’s steady hand on the cash rate is a job well done.
“Retail sales are already in dangerous territory and now consumers are taking a ‘wait and see’ approach to how new budget items including taxes and carbon pricing will affect their discretionary income.
“The RBA pointed to continued expansion in the global economy with varied rates of growth across industries- retailers are only too aware of this, with their own industry dealing with cautious household spending and a higher cost of utilities as well as the cost of running a retail business and rents being among the highest in the world.”
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