Home featured eCommerce Economy Editor's Choice eCommerce The high costs of running a retail business in Australia Joe Kelly October 14, 2014 A new Productivity Commission report has found the cost of doing business in the Australian retail sector is inflated by inefficient red tape and a number of anti-competitive restrictions. The retail sector is comprised of about 133,000 businesses — 95 per cent of which are small businesses — and contributes about 5 per cent of GDP. The PC report makes a number of observations around the deregulation of trading hours, zoning regulations, occupancy costs and workplace relations. It finds that labour and tenancy costs have been rising faster than retail prices, although retail profits have remained relatively stable. Profits have been protected by the lower cost of some goods, the appreciation of the dollar and productivity gains in the retail sector. However, the PC finds that since its 2011 report into the economic structure and performance of the retail sector many businesses continue to operate under a number of onerous regulatory regimes and reform has been piecemeal and incomplete across jurisdictions. 1) Trading hours: The PC report notes that restrictions on trading hours are decades and in some cases even centuries old and carry an opportunity cost for operators in the from of forgone sales. In addition, they also lead to other operational and capital costs by reducing the time needed for stock management and the prospect of a business spreading its fixed costs over a wider volume