Peak retail industry body the Australian Retailers Association (ARA) said the 0.0 percent month on month movement in October retail trade reported by ABS today showed retail growth had halted amid consumers’ suppressed spending and called on the RBA for an interest rate cut in its meeting tomorrow.
ARA Executive Director Russell Zimmerman said the RBA’s decision to cut interest rates in October wasn’t passed on swiftly enough by the banks, and the rate hold in November was unsustainable for consumers as they suppressed their spending.
“It’s clear from the figures that there needs to be an interest rate cut tomorrow in order to stimulate consumers and ensure any available cash is put into their pockets in the lead up to Christmas.
“From the ABS October figures, the ARA has calculated 3.1 percent growth compared to October last year, which is further evidence that retail growth has come to a grinding halt, with consumers reigning in their spending as household budgets are pressured by increased costs associated with utilities and the carbon tax introduction.
“A rate cut tomorrow might be just what consumers need to be able to get out there and start their Christmas shopping. In fact, retailers are now relying on any consumer relief in order to save the silly season.
“Two weeks ago, the ARA estimated shoppers would bag $41.2 billion in Christmas presents before Christmas Day, which is a 3.9 percent rise on last year’s spend in the same period.
“Consumer confidence is somewhat shaken at the moment, with bills rushing in as a result of costs associated with utilities, the carbon tax and other pressures on household budgets.
“Many retailers have started Christmas trading feeling positive about what they can bring to their customers and having invested in offering the best possible shopping experience- the investment is a leap of faith as they wait with bated breath for key regulatory changes and sensible decisions regarding monetary policy,” Zimmerman said.
MONTHLY RETAIL GROWTH (September 2012 – October 2012) Household goods retailing (-1.6%), Food retailing (0.9%), Cafes, restaurants and takeaway food services (-0.3%), Other retailing (-0.5%), Department stores (-0.1%) and Clothing, footwear and personal accessory retailing (-0.1%). Total sales (0.0%)
Western Australia (0.9%), Victoria (-0.5%), South Australia (-1.1%), Northern Territory (1.5%),
Queensland (0.4%), Tasmania (-1.9%), New South Wales (0.1%) and the Australian Capital Territory (-2.2%)
YEAR-ON-YEAR RETAIL GROWTH (October 2011- October 2012) Clothing, footwear & personal accessory retailing (3.2%), department stores (2.8%), cafes, restaurants & takeaways (5.4%), other retailing (1.5%), food retailing (5%) and household goods retailing (-1.5%), Total sales ( 3.1%).
New South Wales (2.8%), Queensland (5.4%), Western Australia (10%), Victoria (-0.1%), South Australia (0.2%), Tasmania (-5%), Australian Capital Territory (5.7%), Northern Territory (3%), total sales (3.1%).
Since 1903 the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $240 billion retail sector which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5000 independent and national retail members throughout Australia. Visit www.retail.org.au or call 1300 368 041.
For interview opportunities with ARA Executive Director Russell Zimmerman call: Andie McMaster, Media & Communication Advisor T: 0408 613 178 E: firstname.lastname@example.org