The Australian Retailers Association (ARA) has expressed relief and 'cautious optimism' following the Reserve Bank of Australia’s (RBA) decision to hold cash rates at 4.35% in its final monetary decision before Christmas.

The decision is particularly significant for discretionary retailers, who make up to two thirds of their profits during this period. A second consecutive increase would have had a further negative impact on the rest of the year for retailers who are already battling a spending slowdown.

ARA CEO Paul Zahra stated that the decision to pause the cash rate will bolster both consumer and business confidence heading into the final few trading weeks before Christmas and the Boxing Day and post-Christmas period. 'We’re pleased to see the RBA provide some much-needed reprieve for consumers and businesses during the busiest trading season of the year,' Mr Zahra said.

The cash rate will be paused for at least two months, a decision that is expected to boost business and consumer confidence during the vital Christmas and Boxing Day trading weeks. 'Avoiding a bitter rate increase blow before Christmas will certainly come as a relief to Australian homeowners, consumers, businesses, and the retail industry,' Mr Zahra added.

While Black Friday proved to be successful for retailers across the country, Mr Zahra suggested it was most likely due to shoppers bringing forward their Christmas gifting to take advantage of the sales. 'While this year’s Black Friday was record-breaking, it may come at the expense of December trading – which we’re expecting to be more subdued,' Mr Zahra said.

The RBA will not meet again until February, with just eight meetings in 2024, giving retailers some breathing space to recover from the festive season's trading.