The recent decision by the Reserve Bank to once again hold rates has done nothing to encourage consumers to spend.
The Australian Bureau of Statistics (ABS) reported that year-on-year sales flatlined in July, with Lindsay Carroll, Interim CEO of the National Retail Association, saying the sector is bracing for a significant discounting period from November.
“Discretionary spending remains subdued, and many retailers are doing it tough in the lead-up to Christmas. Retailers are working hard to generate enough profit, but consumer spending isn’t where it needs to be.
“Ongoing pressure from rising interest rates continues to impact the sector, with little relief in sight.”
Carroll explained that the weight of these interest rates is unprecedented, especially since they’ve done little to address true inflationary drivers like housing supply and low productivity.
Despite the recent rise in retail wages, workers in the industry are still vulnerable due to the high cost of living and cuts to working hours.
“Business owners are having to scale back on shifts just to manage rising costs, which in turn undermines the wage reforms meant to support workers.
“Policymakers need to take greater action to protect the industry and support both businesses and their employees. Retail is the largest employer of young people—the first group to feel the effects of economic downturns,” said Carroll.
Carroll said that more must be done to protect such a vital part of Australia’s economy.
“We need a regulatory environment that supports businesses so they can grow and provide better opportunities for their workers.”
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