Retailers across Australia and New Zealand are reporting heightened concerns about how they will trade in the next three months, driven largely by the current global fuel crisis.
The Australian Retail Council’s (ARC) latest survey of retailers reveals supply chain conditions have worsened over the past month for three in four businesses, with cost pressures intensifying across freight, logistics and energy.
Concerns about the outlook are mounting, with historically weak consumer confidence and continued inflationary pressures. Two in three retailers surveyed report a high or severe level of concern about trading conditions over the next three months, while around half expect the disruption to persist for at least six months.
Shipping and freight costs remain a major pressure point, with around three in five retailers reporting increases of more than 10 per cent. These sustained cost increases are placing significant strain on viability across the sector.
ARC CEO Chris Rodwell said retailers continue to prioritise customers in the face of these challenges.
“Three in four businesses report they are absorbing cost increases either fully or partially,” Rodwell said. “However, this approach has become unsustainable for many. Around two in five retailers now expect they will need to increase prices by approximately five per cent within the next three months to offset rising costs, with some anticipating larger increases if current conditions persist.”
Rodwell added that will rising costs, margins are also tightening, and retailers are being forced into difficult decisions.
“Retailers are doing everything they can to shield customers, but unless we see improvements, the supply chain disruption will unfortunately be felt by customers at the checkout,” he said.
Peak body Retail NZ released a similar quarterly survey this week, showing how the current global fuel crisis is turning the outlook among New Zealand retailers from largely optimistic to deeply pessimistic.
The group’s Retail Radar report shows that while retailers were buoyed by positive sales and rising consumer confidence at the end of 2025 and the first two months of 2026, the situation in the Middle East has put a sudden stop to that trend.
“While 51 per cent of survey respondents were able to meet or exceed their targets from January to March 2026, just 33 per cent believe they will be able to do so next quarter,” Retail NZ CEO Carolyn Young said.
“Retailers have traditionally shown higher levels of optimism than their sales figures would suggest, so the fact 66 per cent don’t expect to meet sales targets in the June quarter tells us the sector is bracing for a significant and sustained downturn.”
Young said she and her team haven’t seen this level of pessimism in almost two years, despite the sector “practically running on empty” since the COVID-19 pandemic with very little in the way of a financial buffer.
Meanwhile, 61 per cent of the Retail Radar survey respondents say they are confident of surviving the next 12 months, but 29 per cent are not certain they can, answering ‘really not sure - could go either way’ – the highest that figure has been in over two years.
Young highlighted that freight costs have become a major worry for retailers, with 79 per cent citing that as a concern. “While that still sits behind both inflation and cost-of-living as the two key concerns of our members (both at 85 per cent), all of these factors are exacerbated by the huge increase in fuel costs that we’re seeing at the pump,” Young said.
The survey also shows NZ retailers are anxious about the wide range of knock-on effects the Middle East conflict and fuel shortages could have. All areas Retail NZ polled on – foot traffic, product supply, consumer confidence, high street vitality and the wider economy – were ranked as a concern by at least 70 per cent of respondents.
“Retail NZ members are clear that they would like to see more support from the Government in this period of economic uncertainty,” Young said.
“They would like to see encouragement for people to continue to work from the office, helping freight companies with the cost of fuel, and encouraging shoppers to buy local.”
Back in Australia, retailers have welcomed recent Government measures to secure fuel supply, adding that fuel excise reductions and changes to the heavy vehicle user charge are providing meaningful, if partial, relief.
However, the sector is calling for further targeted and practical support, the ARC reported. Priority measures identified by retailers include relief for freight and logistics costs, additional energy cost support, and further action on fuel excise. There is also strong support for a greater government effort to strengthen Australia’s fuel and energy security.
Retailers believe that reducing administrative and regulatory burden – particularly inconsistencies across state borders – would deliver immediate benefits. Improved national coordination to reduce freight bottlenecks has also been identified as a critical reform to support the sector both during the current crisis and into the future.
“There has never been a better time than now to lock in reform to reduce inconsistent rules and regulations across Australian states, especially to support logistics at a time when supply chains are already under pressure,” Rodwell said.
The ARC noted that these calls for Government action come as retail trade insolvencies hit three times the level recorded across the whole of the 2021-22 financial year.
“Policymakers must recognise the critical nature of the retail industry's $444 billion contribution to the Australian economy,” Rodwell said. “No matter what lies ahead in this crisis, retail must remain open and operating to ensure households can continue to access essential goods, maintain local employment and support economic stability.”