Staffing costs are a growing concern for retailers as they say it will have the biggest influence of their operations in the June quarter, according to a Dun & Bradstreet survey.
Dun & Bradstreet’s national business expectation survey of retail, manufacturing and wholesale executives, showed nearly one in three (30 per cent) of retail executives said wages growth would have the biggest impact on profit in the coming months, up more than 10 points from 19 per cent in February.
Gareth Jones, Dun & Bradstreet CEO, said retail executives are looking to reduce overhead wherever possible, amid single digit sales (9) and profit (-1) expectations, and this has been reflected in the recent debate around industrial relations, in particular on penalty rates.
"Employee-related overhead is often the first to be scrutinised when a business tries to cut costs," he said.
The survey also found nearly 80 per cent of retail executives have no intention of accessing new lines of credit to help grow operations in the coming quarter, up from 70 per cent in February, with nearly one in four (23%) retailers planning to increase cash reserves.
Concern by retailers over online competition has also increased, up 11 percentage points to 56 per cent since last month. Overall, nearly 40 per cent of Australian businesses expect some form of negative impact from online sellers in the year ahead, up 10 percentage points since February.
"Businesses need to adapt in the current environment with, for example, a strong web-based offering in order to remain competitive in today's market. Main street retailers should leverage the value they can add to customer experience and the advantage this affords them over online competitors," Jones said.