Australia’s peak retail body is calling on the Reserve Bank to urgently cut interest rates from 4.35 per cent as retail growth stagnates.
Rob Godwin, Director at the National Retail Association (NRA), said the latest 3.75 per cent bump to the National Minimum Wage and minimum award wages, plus the increases to superannuation, will put more pressure on struggling retailers.
“Our sentiment report shows 78 per cent of retailers highlighted wage costs as one of the top three constraints to their business’ success in 2024. Many are also being impacted by high insurance premiums and energy costs.
“Retail is cracking under the weight of the 13 successive interest rate hikes and is in desperate need of urgent relief from the Reserve Bank.”
Interest rates were held this month, with Governor Michele Bullock citing that inflation has fallen substantially since its peak in 2022, but the Reserve Bank has not ruled out future increases to interest rates.
“The Workplace Relations team at the National Retail Association has fielded more than double the number of retailer enquiries pertaining to redundancy and restructure from 1 January 2024 to May 2024, compared with the same period last year.
“Many retailers will not survive any further rate rises and we would risk losing current and potential investors into Australia. This would see a higher-than-usual number of retail businesses exiting the market,” said Godwin.
To stay up to date on the latest industry headlines, sign up to the C&I e-newsletter.