Australian Retailers Association (ARA) has approached the Reserve Bank of Australia (RBA) to stop the denial by slashing the interest rates in May to ease out pressure on households.

With poor trading conditions and regular declines or growth below current CPI levels, the Australian retail industry has been struggling to see a healthy year on year growth for the past two years.

ANZ Bank’s recent announcement to hike small business loans with six basis points and decline in consumer sentiment index have troubled the industry further.

ARA executive director Russell Zimmerman said many retailers will be either directly affected by ANZ’s decision or bracing themselves for their own banks to follow suit.

"The RBA as well as the banks need to focus their decisions on easing the pressure in order to stimulate the economy and ensure retail and other industry sectors can keep people employed and concentrate on growth," Zimmerman said.

Zimmerman added that the association extends support to the recent remarks made by Minister for Small Business Brendan O’Connor that the ANZ bank’s decision was hard to comprehend given the very real challenges small business – the engine room of Australia’s economy – is currently facing.

"If consumers do have any leftover funds, they’re afraid to use them, and with budget announcements imminent any moves to raise taxes and charges will spell disaster for households, flow on to the struggling retail sector and resonate through the rest of the economy," Zimmerman said.

A recent survey of consumer sentiment by Westpac Melbourne Institute posted a 1.6% decline with main concerns around the soaring cost of living, petrol prices and ‘low financial esteem’ in relation to attitude to household finances.