The National Retail Association (NRA) has called on the Federal Government to help retailers with energy and insurance costs in the upcoming Budget.
In the NRA’s newly released 2024 Sentiment Report, it was found that 42 per cent of respondents expect business performance to be worse than last year and 55 per cent expect a decline in year-on-year profits in the coming 12 months, with only 15 per cent expecting profits to grow.
Rob Godwin, Director at the NRA, said high interest rates and low consumer confidence have pushed retailers into a cost-of-trading crisis, putting Australia’s second-largest employer at risk.
“The May Budget gives the Federal Government the opportunity to address skyrocketing energy and insurance premiums and take excess pressure off Australian businesses, the lifeblood of our economy.
“Supporting businesses in this Budget means supporting millions of Australian jobs – particularly of lower skilled and entry-level workers most of whom are struggling with cost-of-living.”
The report also revealed that 29 per cent of retailers have cut advertising costs and reduced spending on customer acquisition and retention, which will have a knock-on effect for manufacturers and suppliers across the country.
“If the Government steps up for businesses in May, retailers could start investing in sustainability, wages, and innovation. Keeping businesses competitive is another way to reduce inflation.
“However, if retailers are worried about their futures, concerns are certain to flow through to hiring and investment decisions, and that’s bad news for the entire Australian economy.”
Godwin also expressed particular concern for regional and rural businesses that are especially suffering from poor Christmas trading last year.
“Forty-nine per cent of regional businesses have reported struggling with inflated transport and logistics costs.
“Regional and rural areas have also been adversely affected by low ecommerce adoption rates, (5 per cent vs 18 per cent for metro) and limited staffing options.
“We urge the Government to address high transportation costs and the increased complexity of the supply chain by providing funding mechanisms that support regionally located businesses,” said Godwin.
To stay up to date on the latest industry headlines, sign up to the C&I e-newsletter.