Challenging outlook for consumers and retail as inflationary pressures mount

Australia’s largest peak body for retail, the Australian Retailers Association (ARA), said the latest inflation figures paint a grim outlook for the national economy with cost-of-living pressures continuing to mount on consumers and set to add further strain to businesses.

The Consumer Price Index increased 1.8% in the June quarter with annual inflation now running at 6.1%.

ARA Chief Industry Affairs Officer Fleur Brown said while households are under increased stress, businesses are also severely challenged by rising operating costs.

“Today’s figures, whilst anticipated, deliver a jolt of grim reality for retailers. Households are under increased stress and businesses too, both large and small, are being severely challenged by rising operating costs,” Ms Brown said.

“Whilst inflation in Australia is tracking lower than overseas, including in the US and UK, the current economic outlook has many consumers and business owners on edge. Inflation is now at its highest levels in over 20 years and further interest rate hikes are set to be an inevitable response from the Reserve Bank.

“The mounting pressure on household budgets is likely to impact discretionary purchases as consumers look to rein in their spending.

“While everyday Australians are being challenged by the rising cost of living, the rising cost of business is in many cases more severe, with employers battling operating cost increases associated with fuel, energy, supply chains and rents. It’s an incredibly challenging environment for small businesses in particular, with many struggling with cashflow after navigating the pandemic pressures.

“Whilst prices are inevitably increasing as business costs mount, we note that food and grocery CPI in Australia is tracking behind overseas – with the US running at 12%, Canada at 9% and the UK at 8.5%.

“A combination of global and domestic impacts are driving food inflation, including ongoing supply chain disruptions and higher transportation costs, while global commodity prices are rising significantly in areas such as fertiliser, wheat and vegetable oil. The situation is compounded by the flooding and poor growing conditions. A primary driver of price inflation on supermarket shelves is the higher prices paid to suppliers to compensate for their higher input and ingredient costs.

“Staff shortages continue to cripple retail and the Federal Government’s Jobs and Skills summit can’t come quickly enough. We need so see labour shortages and supply chain challenges remain a top priority for all levels of government to work directly with industry.”

Media Enquiries:

Dominic Cuschieri

M 0418 224 072



About us: The Australian Retailers Association (ARA) is the oldest, largest and most diverse national retail body, representing a $400 billion sector that employs 1.3 million Australians and is the largest private sector employer in the country. As Australia’s peak retail body, representing more than 120,000 retail shop fronts and online stores, the ARA informs, advocates, educates, protects and unifies our independent, national and international retail community. To learn more about ARA’s exclusive member benefits and more, visit



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