An analysis of Australia’s small retail businesses conducted by the Australian Retailers Association (ARA) and the American Express Small Retail Index found that just 49 per cent are meeting or exceeding financial expectations.
The report found that the four crucial concerns for retailers over the next six months are a decrease in consumer spending (59 per cent), wage costs (46 per cent), costs of goods and services (42 per cent) and cashflow management (32 per cent).
Among the survey respondents, 89 per cent said they had incurred higher costs in the past year. To address this issue, 51 per cent said the cost was passed onto consumers, while 47 per cent said they were reducing margins.
The most recent analysis of jewellery sales among independent stores from Retail Edge Consultants detailed a 2.9 per cent increase in revenue in July following consecutive months of decline.
ARA CEO Paul Zahra said that while the report is troubling, it also highlights retailers' perseverance amid adversity.
“This research demonstrates resilience amongst the small business cohort despite tough times,” he said.
“Unfortunately, many are struggling to cope with rising inflation, steep interest rates and the cost-of-doing-business crunch. Whilst unsurprising, it is concerning to see that fears around wage costs are on the rise.”
Retailers are proactively addressing issues, with 67 per cent reporting that they are experimenting with innovative ways to capture new business.
A further 57 per cent said they have a renewed emphasis on loyalty programs, while 30 per cent hoped to improve digital marketing and online engagement.
This research follows a startling report from New Zealand, where retailers outlined a pessimistic outlook.
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