The Reserve Bank of Australia’s decision to keep the cash rate on hold at 2.5 percent may not provide enough support for retailers in the lead-up to Christmas, according to the Australian Retailers Association. ARA executive director Russell Zimmerman said consumer confidence remains extremely fragile after ABS figures released last week indicated monthly retail sales for August increased only 0.1 percent (month-on-month).
“While we are hopeful that September figures (to be released in November) will highlight positive growth with the change in season encouraging consumers to update their wardrobes, it is imperative that the Federal Government and the RBA now do all that they can to ensure that retail trade is fully supported,” he said.
“The festive season is fast approaching and interest rates must remain low in order to support business.”
Zimmerman said there had been talk that interest rates might start to rise in 2015 but retailers believe the RBA will need to continue to support the economy via low interest rates “for some time”.
“With Christmas right around the corner, retailers have already started to invest in new marketing strategies including hiring and training Christmas casuals. The cost of doing business is increasing daily. Now is the time for the RBA to lower interest rates and aid retail growth.”
