Australia’s national retail bodies have welcomed the Productivity Commission’s Relative Cost of Doing Business in Australia report, which highlighted several key areas requiring immediate government attention including occupancy costs and the deregulation of trading hours.
The release of the Productivity Commission’s report coincides with the COAG meeting in Canberra.
The report highlighted that the deregulation of trading hours is expected to increase economic activity and lower retailer’s costs of doing business, as well as increase choice and convenience for consumers.
It also noted the high cost of doing business particularly within the clothing and footwear sectors, almost double that of USA and the UK. Labour costs to revenue ratios were notably higher for clothing and footwear retailers operating in Australia.
Occupancy cost ratios as a share of sales revenue are also higher here in Australia than in the UK, USA, and Europe.
“We urgently need to look at zoning and planning as well as accessibility to information for retailers regarding rents. In relative terms, rent as a share of revenue is higher in Australia than the UK and USA at a broad industry level,”Russell Zimmerman, executive director of the Australian Retailers Association (ARA), said
Other costs have also risen including electricity, 36 per cent; insurance, 34 per cent; air conditioning, 21 per cent; cleaning, 19 per cent; and repairs and maintenance, 13 per cent.
While the portion of businesses that receive orders via the internet is growing, the report indicated that 38 per cent of Australian retailers assessed could be called digital commerce laggards.
Zimmerman said the ARA will be working alongside the retail industry and government to ensure the cost of doing business in Australia is sustainable.
“We look forward to the government’s response to these matters – now the Productivity Commission report has been finalised it is time for actions, not words,” he said.
ANRA CEO, Anna McPhee, called on all state governments to “open the doors” to jobs growth and consumer choice by quickening the pace of reform and immediately acting on the Productivity Commission’s findings.
“The complexity of current restrictions placed on trading hours, such as the difference in hours for the sale of light bulbs versus light fittings, is impacting employment growth and customer choice.
“The findings follow similar findings made in 2011 and similar recommendations in numerous other inquiries. It’s about time Governments stop wasting time and money on reviews and “open the doors”,” McPhee said.
