Keeping interest rates stable will give retailers breathing room to build on recent small gains in the sector.
Australian National Retailers Association (ANRA) CEO Margy Osmond welcomed the Reserve Bank’s decision to keep the rates at 4.5 per cent saying it was a relief for retailers and consumers.
“Retailers, and this is especially true in NSW, immediately feel the effects of an interest rates rise,” she said. “Consumers cut spending in retail when they are concerned about higher mortgage payments.
“In the sector we’ve had some growth for the past three months, and it’s a delicate balance, an interest rate rise now could have knocked the sector. Retailers have been working hard, and discounting a great deal, to keep customers coming through the doors to play their role in keeping the Australian economy robust,” she said.
“Australia has been operating as a two-speed economy. The resources sector has come back from the global financial crisis with a vengeance and there was an expectation that all areas of the economy bounced back with them.
“But consumer’s confidence took a hit in the downturn, people are less eager to spend and retail has been slow to come back. Now we are starting to see some ‘uptick’ a full return is some way off, but we remain hopeful of better retail results in the last quarter of 2010,” she said.
The Australian Retailers Association (ARA) executive director Russell Zimmerman said retailers couldn't have coped with another rate rise taking discretionary cash away from consumers.
"Another rate rise would have cost jobs,” he said. “As it stands, retailers are trying their hardest to hold onto staff during a period of poor trade while they manage higher wage bills due to the modern award and new minimum wage that both came into play last week.
"Retailers are inherently optimistic but the current state of trade for the sector is bleak. So, right now retailers need any help they can get to hold onto their staff.”