Saturday, March 9th, 2013 - Roy Morgan Research
Of all small retailers, competition is toughest for businesses selling food and groceries, Roy Morgan Research reveals.

55% of small food retailers in Australia—such as grocers and convenience stores—report that competition affected business performance in the last 12 months. This is 23% points higher than for small businesses across all industries, and 12% points higher than the average for small retail businesses. Small businesses are those with fewer than 20 employees.

More than one in two small Hardware and Gardening (53%) and Electronics (52%) retailers also rate competition as a determining factor on overall business performance, whereas competition is less fierce among small Clothing and Footwear (42%) and Furniture (37%) retailers.

Small business performance influenced by Competition


Source: Roy Morgan Business Single Source, February 2012 – January 2013, All Australian Small Businesses (fewer than 20 employees), Sample n= 11,542.

54% of small food retailers report underperforming in the past year—7% points above the small retail average. 37% say competition will be a greater influence in the coming year (compared to 26% of small retailers and 21% of small businesses), while only 5% expect it will lessen.

Nevertheless, despite high levels of competition 45% of small food retailers have a confident outlook for 2013 and expect overall business performance will improve.

Nigel Smith, Director of Business Research, Roy Morgan Research, says:

“The Australian Competition and Consumer Commission’s (ACCC’s) renewed interest in the competitive environment for food retailing is timely, as many small retailers—particularly food retailers—are facing difficult conditions in 2013.

“Small Food retailers and Hardware and Gardening retailers are almost twice as likely as the average small business to expect to face increasing competition over the next 12 months.

“Competition only benefits consumers when it’s maintained in the long term. Predatory pricing by larger retailers—and increased take-up by price-conscious consumers—may lead to fewer competitors, an ultimately detrimental situation for both consumers and the retail industry."

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