RETAILERS still reeling from a depressed Christmas predict Queensland floods will carve 5 per cent off revenues and push many businesses over the edge.
Retailers have taken the unusual step of writing directly to the Reserve Bank Governor to head off a potentially damaging 0.25 per cent rise today.
Analysts say there is little chance of a rate hike, but are wary of inflation figures showing price pressures picked up in January because of rising food costs.
The price of fruit and vegetables is already escalating, helping to push up inflation by about 0.4 per cent in January compared with 0.2 per cent in December.
The National Retail Association says retail figures for December won't come out until February 7, meaning the Reserve may not understand the full extent of the December down turn.
The NRA says there is no doubting the effect of the Queensland floods.
"Loss of trade attributable to store closure, power failure, staff shortages and supply disruptions was widespread," Gary Black, NRA executive director said in a letter to Reserve Bank boss Glenn Stevens.
"It is our expectation that retail trade in Queensland may fail by more than 5 per cent in January because of the floods."
Mr Black also points out the pressure overseas-based online retailers who escape the GST and other costs are having on local business.
"In many cases it is small, family-run retail outlets which are being hardest hit by this loophole," he said.
The Reserve Bank of Australia board meets this morning.
Have your say
Add your comment on this story