Australian retailers are calling for urgent government support as the Middle East crisis adds fresh strain to global retail supply chains, driving up freight, fuel and energy costs.
New survey data from the Australian Retail Council (ARC) shows most businesses are facing worsening supply chain disruption and rising operating expenses.
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The April survey of more than 160 retailers found that around three in four reported deteriorating supply chain conditions over the past month.
The findings reflect wider global trends, as instability in the Middle East disrupts shipping routes and contributes to higher logistics costs across international retail markets.
Rising costs hit supply chains
Supply chain disruption remains the main concern for Australian retailers, with sharp increases in freight, fuel and energy costs. Many businesses reported double-digit rises in shipping expenses, linked in part to higher global oil prices and longer transit times.
The Middle East crisis has added pressure to key trade routes, increasing the cost of moving goods into Australia. Retailers say this is feeding directly into their cost base at a time when margins are already tight.
One respondent described “a significant increase in the cost of doing business”, noting that supply chain disruption is now a persistent challenge rather than a short-term issue. Others pointed to “ongoing freight volatility” and rising fuel costs as key drivers of price pressure.
These trends mirror global retail supply chain disruption, where geopolitical risk and inflation continue to affect sourcing and distribution.
Weak demand adds pressure
Rising costs are being felt alongside subdued consumer demand. The survey shows that around two in three retailers are concerned about trading conditions in the months ahead, citing cost-of-living pressures and cautious spending.
This combination is limiting retailers’ ability to pass on higher supply chain costs. Many report absorbing part of the increase to remain competitive, which is reducing profitability.
Industry feedback highlights a “double impact” on the sector, where businesses face both higher input costs and softer sales. Some respondents warned that continued supply chain disruption could lead to reduced staffing, delayed investment and store closures if conditions do not improve.
The pattern reflects broader global retail trends, where inflation and weak consumer confidence are weighing on performance.
Calls for government action
Retailers are urging the Australian government to act on rising supply chain costs and improve operating conditions. Key requests include fuel cost relief, lower energy prices and measures to reduce logistics expenses.
There are also calls to simplify regulation and reduce compliance burdens, which businesses say are adding complexity to already strained supply chains. Retailers want more consistent rules across states to improve efficiency and cut delays.
“Without action, costs will continue to rise,” one respondent said, warning that pressure on margins could “flow through to prices, jobs and business viability”.
Industry groups also stress the need for long-term reform to strengthen supply chain resilience, including more stable energy supply and better coordination of freight networks.
The ARC survey underlines how the Middle East crisis is amplifying existing supply chain disruption in the global retail sector. For Australian retailers, the immediate priority is clear: reduce costs, improve efficiency and stabilise trading conditions in an increasingly uncertain market.
