The failure rate of Australian retail businesses reached a record level of 0.82 per cent in the September quarter, 1.5 times higher than the failure rate for the Australian business sector as a whole, which was 0.55 per cent, according to research from analysis firm illion.

The data is based on businesses that disclosed external administration and liquidation to ASIC, or were involuntarily deregistered or deemed insolvent. The figures show an industry struggling to face challenges on multiple fronts, illion chief executive Simon Bligh said.

“The retail sector is battling weak consumer confidence, falling house prices and competition from online and overseas competitors,” Bligh said.

“One of these alone would hurt growth, but all three is a tough combination, and the results are clear in our analysis.”

Conversely, Bligh said some retailers could see their business and service offerings expand through the peak shopping season, with a pick-up in wage growth potentially boosting consumer confidence.

“It’s not a hopeless picture for bricks-and-mortar outlets that can stick it out during a downturn,” Bligh said.

According to the research, failure rates increased nationwide during the September quarter, with the Northern Territory showing the highest failure rate of 0.79 per cent.

Tasmania produced a rate of 0.34 per cent – a testament to the benefit of the population growth and strong housing market buoying the state’s economic performance over the last two years.

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