The RBA’s decision to hold interest rates at 3.75 per cent will give retailers a chance to post consistent growth after a year of difficult and irregular trade.
Australian Retailers Association (ARA) executive director Russell Zimmerman said the RBA has listened to retailers concerns that any interest rate rise in February would have been bad timing for retailers who were yet to feel the impact of three consecutive rate rises from October last year.
"Today the RBA has acknowledged February as the toughest month for consumers and retailers – particularly in light of the fact full impacts of interest rate rises in October (0.25), November (0.25) and December (0.25) last year will take three to six months to flow through to the retail sector,” he said.
Retail trade has been very patchy for the past 12 months, but the hold on any interest rate rises will give retailers some breathing space and a fair go at getting back onto their feet through solid, consistent growth outside of the traditionally higher trading figures of the festive season.
"Official December Christmas figures will be released on Thursday, but more importantly, waiting to see post-Christmas retail trade figures in January and February before making further increases to interest rates will further demonstrate the RBA’s commitment to ensuring a return to steady economic growth," said Zimmerman.
CEO of the Australian National Retailers Association (ANRA) Margy Osmond said it was pleasing to see the Reserve Bank had listened to the concerns of retailers.
“Traditionally the first quarter of the year is the ‘dead zone’ for retailers and we’re already seeing the sector slow in this post-stimulus economy," she said.
"It’s only now, after the Christmas tree has been packed away and the credit card statements are on the kitchen table that people really begin to start factoring in the last three interest rate increases into their budgets and cutting back on their spending. Another interest rate rise would have been too much too soon."
Retail is in for a tough year, with Access Economics forecasting that real retail sales will only grow by 2.1 per cent in 2009-10, and 1.4 per cent in 2010-11, before stronger growth returns in 2011-12 of 3.1 per cent.