Amidst a slump in spending reflected in November’s retail trade figures, desperate retail business owners are calling on the Reserve Bank to lift the brakes on the economy.
The Melbourne Cup Day rates hike appeared to halt spending momentum, with November’s spending growth at just 2.2% compared to the previous year, indicating a decline in real terms when factoring in inflation and population growth.
National Retail Association Director, Rob Godwin, expressed disappointment, particularly considering the growth of Black Friday and Cyber Monday sales events. He emphasized that the Reserve Bank’s intention to restrict spending had been achieved but warned that the first quarter of 2024 might be the most challenging in years for businesses.
Calling for a resurgence in consumer activity, Godwin urged the Reserve Bank to initiate interest rate cuts once again. The November figures revealed a shift in consumer behavior, with shoppers seemingly waiting for pre-Christmas sales to focus on household essentials, resulting in a surprising 7.5% increase in household goods retailing.
“We predict the first quarter of 2024 is going to be the most challenging quarter for businesses in many years.
“For the sake of business owners and their employees, we are urging the Reserve Bank to start cutting interest rates again,” he said.
While department store sales rose by 4.2%, the clothing, footwear, and personal accessory retailing sector only saw a modest 2.7% increase. CBD shopping centers experienced a surge in footfall due to heavy discounts, slightly benefiting cafes, restaurants, and takeaway food services with a 0.4% sales increase in November.
Regionally, South Australia led in retail sales growth with a 2.8% increase, followed by Victoria at 2.4%, and Queensland at 2.2%. As the voice for over 60,000 stores nationwide, the National Retail Association, with nearly a century of service, emphasizes the urgent need for economic measures to support businesses during these challenging times.