More than three quarters of retail businesses in Sydney have reported that they are operating below pre-pandemic levels, according to the City of Sydney’s recent annual business needs survey.
More than half of the respondents in retail reported being financially worse off in 2022 compared to the previous year. However, 36% are optimistic about their financial position over the next year, despite being financially worse off this year.
The report said that retail businesses are relying on marketing to attract and retain customers, saying they have mostly focused on the improvement and expansion of their website and social media marketing over the past year.
“One of their top priorities is to continue strengthening their social media marketing over the next year and to also improve customer acquisition and retention,” the report read.
“Retail businesses have generally requested support in the form of business grants, precinct marketing and promotion, and greater communication and support from the city and other levels of government.”
Despite the reports from the retail sector, the City of Sydney said that more than 75% of all respondents across all sectors said they expect their business will be financially better off in the coming year. The City of Sydney said this is a significant improvement from the previous two years.
The report also found that Sydney’s overall local economy has recovered to pre-pandemic levels.
Sydney Lord Mayor Clover Moore said the report would assist the City of Sydney in the allocation of business grants, capacity building programs and other support.
“The results of this report show that even though Covid is still affecting us, businesses are feeling optimistic about the future,” Moore said.
“One of the most important things the City of Sydney is doing is continuing to support businesses with our post-Covid recovery and revitalisation – like how we’ve extended free outdoor dining until June 2025.”
Moore said the City is spending more than $530 million in the 2022/23 financial year to help businesses and communities recover from the pandemic. This will include maintaining facilities, parks and other public spaces.
She also said it is continuing to work with NSW State Government on a 24-hour economic strategy to help “activate” the city through retail activities and events.
In August this year, the City of Sydney and Business Sydney invited businesses to take part in the survey and share key insights on their needs, priorities and operational challenges. The City said that while the results consider the challenging broader economic outlook, there is an overarching optimistic view with the increasing return of international tourists, students and workers to the city.
It said that current business needs include: financial support such as business grants, promotional and marketing support for precincts, assistance with seeking employees, and calls for less red tape and regulation.
The City of Sydney said it will consider all insights from the report, examine the opportunities and challenges, and work closely with the NSW Government and other key industry bodies including Business Sydney to help shape future support initiatives.
Business Sydney executive director Paul Nicolaou said the survey confirms the need to find innovative ways to encourage employees back to the office.
“We also need to work hard on changing attitudes and habits to get more workers and visitors into the city streets mid-week, to boost the vibrancy of our country’s number one tourist destination and economic driver of the NSW economy,” Nicolaou said.
“The return of international visitors was viewed by many as playing a big role in the return to pre-pandemic economic activity. This is happening slowly but surely, so we must work together to attract more travellers, especially now that the sun is shining again.
“The government’s $60 million fund to attract international airlines to resume flying into Sydney is an example of government working with business to restore tourism. We need to bring our city to life to make it the best experience for visitors.”
The report also highlights that business needs are changing and continuing to change as the environment improves. To support this, the City of Sydney recently developed a new economic strategy discussion paper, which sets out a plan to support long-term economic growth and prosperity across the city centre and local area.
Other key insights from the report include that the return of students, tourists and migrants is set to drive economic growth during 2023 in Sydney, with economic growth expected to outpace both the state and national average.
And two-thirds of businesses reported their staffing levels in 2022 increased or remained the same compared to May 2021, with 90% of these businesses also expect their staffing levels to remain the same or increase over the next year.