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Most Australian small and medium-sized businesses are worried about their financial future as cost-of-living pressures continue to stifle consumer spending.
New Australian Retailers Association (ARA) and American Express research found 55 per cent of small to medium-size retailers were uncertain or concerned about their future, while 43 per cent falling short of financial benchmarks.
Slowing consumer spending was the most pressing concern for retailers, along with wage costs, cost of goods and services, as well as staffing shortages.
ARA CEO Paul Zahra issued an ominous warning to businesses, suggesting the run uo tp Christmas could bring even more pain.
“Discretionary retailers are at the coalface of this pressure as we head into the Christmas trading period, when most discretionary retailers make up to two-thirds of their profits,” he said in a statement.
“Our small retail community is feeling the crunch as shoppers scrutinise their spending and costs continue to increase across the board – wages, rent, utilities, insurances and supply chain costs.”
A separate survey by comparison site Finder found nearly 70 per cent of Australians were trying to soften the financial blow of the festive season.
A little over a quarter of those surveyed in the national survey said they planned to take advantage of cheaper goods during the Black Friday sales weekend next month.
Getting in early with gift and food purchases was another money-saving strategy popular with one-in-four Australians.
Gift giving limits and foregoing trips are other ways some households plan to save money.
Inflation continues to wreak havoc, with the research of small retailers finding more than half (54 per cent) of respondents had to pass on higher costs to customers, a massive jump from just 24 per cent four months ago.
Retailers are responding by driving investment in customer acquisition and loyalty, while also exploring new avenues through artificial intelligence and e-commerce.
Mr Zahra lauded their “extraordinary resilience” to try and innovate their way to a better position.
American Express’ Emily Roberts said consumers should get out there and support small businesses if they can.
“Every dollar spent with a small business is a dollar towards maintaining the vibrancy of our local communities, rewarding the tenacity of business owners and ensuring our local stores open their doors for another day,” she said in a statement.
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