The reserve bank’s interest rate cut may have been music to the ears of the nations’ retailers, but it could take a while before they start to reap the benefits.
So says Peter Birtles, head of Super Retail Group, the company behind the Rebel sports, Supercheap Auto and BCF Boating Camping Fishing chains.
Mr Birtles expects the Reserve Bank of Australia’s (RBA’s) decision to cut the official cash rate by 50 basis points would help boost sales in coming months.
But it would take a few weeks before the effects flow through to the cash registers.
“I think it’s got to be good for confidence once the banks have taken a decision and passed on what they’re going to pass on,” he told AAP on Thursday. “But it takes a bit of time for consumers to understand what their mortgage payments are going to be and what that means for their disposable income and then they can reassess.”
Retailers and other industry groups have been calling for interest rate cuts for months to help encourage consumers to part with their cash.
The RBA granted their wish on Tuesday, cutting the cash rate to 3.75 per cent.
National Australia Bank and the Commonwealth Bank have since passed on rate cuts to mortgage and business customers, but their reductions have not been as large as the RBA’s.
ANZ and Westpac are yet to announce whether they will follow suit.
Mr Birtle’s comments came as the company reported sales growth across its businesses in the 17 weeks to April 28, despite the depressed trading conditions hurting Australia’s retailers.
Like-for-like sales, which strips out the effects of new or closed stores, were 3.0 per cent higher at the group’s sports and auto & cycle division.
The leisure division also lifted sales by 2.3 per cent.
Mr Birtles while trading conditions were tough, people were still willing to spend money on leisure activities.
“People still want to enjoy themselves and fortunately we’re able to help them do that,” he said.
Super Retail’s shares closed 19 cents, or 2.5 per cent, higher at $7.84.