Australian retailers are ramping up pressure on the Federal Government to fast-track regulatory reform and deliver further cost relief, as worsening global supply chain disruptions threaten margins, pricing and business viability.

New data from the Australian Retail Council (ARC) shows conditions have deteriorated for three in four retailers over the past month, driven by escalating freight, logistics and energy costs.

The disruption, linked in part to ongoing conflict in the Middle East, is compounding already weak consumer confidence and persistent inflation.

The outlook is increasingly bleak. Two-thirds of surveyed retailers report high or severe concern about trading conditions over the next three months, while around half expect supply chain issues to persist for at least six months.

Shipping costs remain a key pressure point, with roughly 60% of businesses reporting increases above 10%. While many retailers have absorbed these costs to protect customers, that strategy is reaching its limits.

“Margins are tightening and difficult decisions are unavoidable,” ARC CEO Chris Rodwell (pictured) said. “Around two in five retailers now expect to raise prices by about five per cent in the next three months.”

Retailers have welcomed recent government action on fuel supply, including fuel excise reductions and changes to heavy vehicle charges, but say broader support is needed.

Key priorities include targeted relief for freight and energy costs, as well as stronger national coordination to ease logistics bottlenecks.

The sector is also calling for reduced regulatory complexity, particularly inconsistencies across state borders, which it says are exacerbating supply chain inefficiencies.

With retail insolvencies already tripling compared to 2021–22 levels, the ARC is urging additional measures such as tax deferrals to support cash flow – especially for small businesses which made up the majority of survey respondents.

Retailers also warned against policies that could reduce foot traffic, including work-from-home mandates.

The ARC survey was conducted between 21 and 24 April, with 160 businesses participating.