SYDNEY/BANGALORE (Reuters) – Australia’s retailers, hit by tight-fisted consumers as wages grow at their slowest since at least the late 1990s, face a worsening downturn in revenue that bolsters the case for another interest rate cut next week by the central bank.

Australia’s 16 retailers with market capitalization of at least $100 million are forecast to post an 8.5 percent drop in combined revenue to $181.1 billion for the fiscal year to June 2015, Thomson Reuters data from analyst estimates shows. That is the biggest drop in the six years for which comparable data is available. It coincides with a weakening trend in the wage price index, which grew at an annual pace of just 2.47 percent in October-December, its slowest since the series began in 1997.

The Australian economy is struggling to regain momentum as a commodities price rout batters the mining sector. The central bank, concerned about faltering growth, cut interest rates to a record low this month and the debt market implies a roughly 50-50 chance of another cut at its policy meeting next Tuesday.

Woolworths Ltd, Australia’s biggest supermarket chain operator, offered more reason to act when it warned on Friday that full-year earnings would be at the lower end of consensus estimates, echoing weak numbers this month from Pacific Brands and Specialty Fashion. Woolworths shares dropped nearly 10 percent on Friday and the S&P/ASX 200 consumer staples index, which includes grocers and other retailers as well as drinks companies, is down 6 percent over the past 12 months. Only the energy and materials indexes have put in a worse performance.

“It’s a very tough space,” said OptionsXpress analyst Ben Le Brun. “We are seeing cautious consumers looking for the best bargain possible. The brick-and-mortar retailers are under earnings pressure and margin compression.”

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