New research reveals small retailers are looking for creative ways to grow their businesses with about two-thirds (67 per cent) looking for innovative ways to acquire new business, more than half (57 per cent) focussed on encouraging customer loyalty, and nearly a third (30 per cent) wanting to improve online engagement with their customers as a priority.
The latest Australian Retailers Association (ARA) & American Express Small Retail Index found a mixed picture of performance, with just over half (51 per cent) of Australian small retail businesses performing below or significantly below their financial expectations, while nearly half (49 per cent) are meeting or exceeding their financial forecasts.
The research found the top four concerns for small businesses for the next 6-12 months are a slowdown 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). [1]
ARA CEO Paul Zahra said the research confirms many small businesses are doing it tough yet are seeking opportunities for growth.
"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.
"Whilst unsurprising, it is concerning to see that fears around wage costs are on the rise."
Robert Tedesco, American Express Vice President of Global Merchant Services Australia, said supporting small business owners is critical for maintaining vibrant communities.
"Small businesses are the backbone of the local economy, which is why American Express is focussing on helping to drive more business through their doors," Tedesco said.
"Initiatives like the American Express Shop Small campaign, underway now through 31 August, can help to make a difference by connecting shoppers with local retailers and reminding shoppers that every dollar spent with a small business contributes to the vitality of their communities."
Most (89 per cent) survey respondents said they have incurred higher costs in the past 12 months. Small retailers reported using a combination of measures to deal with those increased costs, such as passing costs onto consumers (51 per cent), reducing margins (47 per cent), finding savings in other areas (37 per cent), and reducing staff (37 per cent) being highest among the solutions.
Mr Zahra said the ARA will continue to advocate for relief measures from the Federal Government for small businesses.
"We need urgent action to ensure Australia's $420 billion retail economy not only survives but thrives," Mr Zahra said.
[1] Research involved 382 small business owners from the retail and hospitality sectors surveyed in the ARA & American Express Small Retail Index, conducted in June 2024 by the Queensland University of Technology, on behalf of the ARA and American Express.
