More than half of Australia’s small retailers are not meeting their financial targets, with the majority worried about a downturn in consumer spending.
The latest Australian Retailers Association (ARA) & American Express Small Retail Index found 51 percent of the country’s small retail businesses were performing below or significantly below their financial expectations.
ARA CEO Paul Zahra said the recent survey found the top four concerns for small businesses for the next six to 12 months were a slowdown in consumer spending (59 percent), wage costs (46 percent), costs of goods and services (42 percent) and cashflow management (32 percent).
Mr Zahra said despite many businesses doing it tough, there was still a growth mindset among small retailers.
He said about two-thirds (67 percent) were prioritising looking for innovative ways to acquire new business, while more than half (57 percent) were focussed on encouraging customer loyalty and nearly a third (30 percent) wanted to improve online engagement with their customers.
“Small businesses are a crucial part of the retail community, and a bellwether for the health of our sector. This research demonstrates resilience amongst the small business cohort despite tough times. Unfortunately, many are struggling to cope with rising inflation, steep interest rates and the cost-of-doing-business crunch,” he said.
Most (89 percent) of survey respondents said they had incurred higher costs in the past 12 months.
Mr Zahra said small retailers reported using a combination of measures to deal with those increased costs, such as passing costs onto consumers (51 percent), reducing margins (47 percent), finding savings in other areas (37 percent), and reducing staff (37 percent).
