Supply chain disruption, fuel costs and broader operating pressures continue to weigh heavily on the retail sector, according to new Australian Bureau of Statistics (ABS) data.

The latest ABS Business Conditions and Sentiments survey, conducted from 4 to 15 May, found 74% of surveyed retail businesses were negatively affected by fuel prices or availability, 58% reported higher operating expenses, and 45% reported lower revenue over the previous four weeks.

Retail was also among the industries most exposed to supply chain disruption, with 31% of surveyed businesses reporting impacts. A further 41% of respondents expect revenue to decline over the next month, underscoring the pressure on margins as costs rise and consumer demand remains subdued.

Australian Retail Council (ARC) Chief Economist and Chief Policy Officer Glenn Fahey says the official data reinforces the urgent need for practical measures to reduce business costs and improve supply chain resilience.

“The ABS has now independently confirmed what retailers have been telling us for weeks, that supply chain disruption and fuel costs were putting serious pressure on margins, staffing and business viability,” he says.

“The official numbers are concerning, but our own retail data suggests the pressure is even sharper on the ground, particularly for smaller operators with less room to absorb rising costs.

“Retailers have done everything they can to shield customers, but that becomes harder when freight, fuel and compliance costs keep rising at the same time consumer demand remains fragile.

“This is exactly why retailers need practical relief, not more cost and complexity.”

ARC findings

According to the ARC’s own recent survey, three in four surveyed retailers reported that supply chain conditions had worsened in April, while two in three reported high or severe concern about the next three months.

More than three in five surveyed retailers reported shipping and freight cost increases of more than 10%, while three in four said they were fully or partially absorbing those costs rather than passing them directly on to customers.

“Our own surveys show businesses are calling for practical measures that improve freight productivity, strengthen supply chain resilience, reduce energy and operating costs, and ease unnecessary regulatory burden so retailers can remain competitive and keep prices down,” says Mr Fahey.

“Now more than ever, is the time to pursue the reforms that reduce the cost of doing business.”