The Executive Director of the Australian Retailers’ Association, Russell Zimmerman, said he was hopeful that the Reserve Bank of Australia’s decision to cut interest rates by 25 basis points – the third rate cut since the beginning of June – would boost retail sales by easing pressure on household budgets.
Speaking about the RBA’s move to again cut official rates, Mr Zimmerman said the ARA anticipated the decision would complement recent policy measures to spur an uptick in spending and help struggling retailers.
“We haven’t seen the jump in retail sales we were hoping for, and we are still waiting to see the flow-on effects of earlier rate cuts, tax cuts, and increases to the minimum wage,” Mr Zimmerman said.
“Retail trade figures in recent months have continued to lag but we keenly await the release of August retail trade figures to see whether the other stimulatory measures have kicked in,” he added.
Mr Zimmerman expected wage increases and multiple rate cuts to ease the load on the household wallet, leading shoppers to loosen the purse strings after receiving their tax refunds.
“The August retail trade figures (due for release by the ABS this coming Friday morning) will indicate whether consumer spending habits have been freed up, or whether they have pocketed the cash and put off their purchases for the future,” Mr Zimmerman said.
“It’s no secret that retailers have been doing it tough, so we hope this decision sparks a sustained resurgence in retail spending in concert with the other stimulatory measures,” Mr Zimmerman concluded.
