The Australian Retailers Association is urging the Reserve Bank of Australia to lower interest rates today following the release of July’s “dismal” retail trade figures.
ARA executive director Russell Zimmerman said the Australian Bureau of Statistics’ retail trade figures for July were cause for major concern over discretionary spending, with year on year declines in clothing and footwear (- 7.5%), department stores (- 2.2%) and household goods (- 0.3%).
“While there was an overall growth in sales of 0.5 percent when compared to June and 1.4 percent when compared to July last year, figures for clothing, household goods and department stores reflect a continuation of the consumer confidence spiral, with households saving rather than spending and struggling to come to terms with the soaring cost of living,” he said.
“Also for the first time this year, sales for the café, restaurant and takeaway category showed a year on year decline, dropping three percent, which is often a sign of consumers tightening their belts even further as they make an easy saving on a restaurant meal in favour of eating in.”
He said retailers are acutely aware of consumer struggles as the reason for poor trade and are not only calling for a drop in interest rates but also “actively seeking assistance for the retail sector”.
“Looking ahead to the spring season, retailers aren’t expecting a break, but rather a continuation of over 18 months of dismal trading conditions.”
He concluded that if interest rate action isn’t taken immediately, retailers are in great danger of having to cut staff, close stores and contribute to the economic storm brewing through key industries.