Retailers said today's Reserve Bank of Australia's decision to hold the cash rate at 4.10% is a significant blow for consumer and business confidence that will delay the recovery of the retail sector.
The Australian Retailers Association (ARA) and National Retail Association (NRA) said weak consumer spending and high business costs continue to put immense pressure on retailers.
"The RBA's move to keep the cash rate on hold is a distressing decision for retail businesses around Australia - particularly given we are well within the target inflationary range outlined by the RBA. This certainly prolongs the pain many households and retail businesses are under and may unfortunately be a death sentence for some businesses," said ARA Chief Industry Affairs Officer Fleur Brown.
"With consumer spending in the doldrums, business costs at an all-time high, and little relief in sight from government we remain far from a retail recovery. The climate of geopolitical tension around trade and tariffs also adds uncertainty for retailers.
"That's why we must see more sustained efforts to drive momentum for this sector which employs one in ten Australians and contributes $430 billion to our economy. We can't have an economic recovery without a retail recovery. "
National Retail Association Interim CEO Lindsay Carroll said retailers are already beginning to see the fruits of the latest rate cut, and the sector hopes for more cuts this year.
"Consumer sentiment is on the uptick, and we're starting to see consumers trickling into shopping centres, and not just for groceries. Wages are up and inflation is down, so Aussies feel safer about spending.
"However, many retailers are still struggling to keep their heads above water. Business insolvencies have risen sharply in the last couple of years, and the Federal Budget was another opportunity for the government to show the ailing sector a little bit of support.
"We urge policymakers to focus on measures that boost investment and productivity, so, as Australia's second-largest employer, retailers can continue to provide opportunity, job security, and sustainable growth for the economy, and maintain the momentum needed to drive recovery."
The ARA and NRA's federal election blueprint can be accessed here.
