The National Retail Association (NRA) says the Reserve Bank of Australia’s (RBA) ninth consecutive interest rate hike is heartbreaking for Australian consumers and retailers who are already struggling to navigate economic uncertainty.
CEO Greg Griffith said the RBA’s official rate increase has risen to 3.35 percent, the highest in a decade.
“Consumer spending took a nosedive in December, dropping by 3.9 percent and breaking an 11-month streak of recorded growth,” Mr. Griffith said.
“A lot of Christmas spending occurred in November, and now that we’re over the festive-season high, consumers are curtailing their spending habits. This is the perfect time for the RBA to stop, wait and watch its rate hikes take gradual effect.
“Another consecutive interest rate increase is not only irresponsible but could cause an economic downturn and send some small retailers into an early recession with all their competing costs.
“The retail sector is fully reliant on consumer spending. While large retailers may cope with slowed economic growth, a downturn would hit small businesses much harder. We can’t afford to play fast and loose with the heart of the Australian economy.
“We call on the RBA to wait until small businesses and consumers have picked up the pieces from the RBA’s latest interest rate hike before deciding on another increase next month.
“We also ask the Federal Government to address the true contributors to rising costs, namely supply-side challenges, and rising energy prices, through guided policy that protects small retailers.
“Given the chunk that’s been taken out of Australia’s pockets it’s likely a lot of couples will be staying home this Valentine’s Day, the second time the RBA has driven a wedge between consumers and retailers at a time of celebration,” he said.
The National Retail Association is the voice of modern retail, representing more than 60,000 stores across Australia. It has been serving businesses in the retail and fast-food sectors for close to 100 years.
For more information, contact the NRA Media Unit: marketing@nra.net.au