Small businesses feeling effects of tightening belts

TOTAL household spending on goods has fallen by 0.6 per cent compared to the March quarter 2023, and this tightening of belts is having a flow on effect to small businesses and traders in Inverloch.

While there is a mixed reaction from locals as to how their businesses are faring, many agree that trading is either flat or on a downward trend.

One retail business stated their customer count had dropped by over 25 per cent, heading into the last month of the financial year, and sales were down by just under 20 per cent.

A second retailer noted that for the first time since COVID their rolling last three-month sales were down 18 per cent, their customer count was down 13 per cent and their average order value was down by eight per cent.

Lara from Paperplay Inverloch Newsagency believes that current economic conditions are forcing people to be more careful with how they spend their money. 

“Business is down because I think people are tightening their belts. We have definitely noticed it in the last six months.” 

Staff at the newsagency have also noticed that while the town remains busy in peak periods, people aren’t coming in and spending money like they traditionally have.   

Lara is thankful that the business maintains some consistency in trading with daily regulars and weekend tourists coming in to buy the paper. 

While Roxanne Thompson from Cafe Al Mare, commented that trading is the worst it’s been in the five years.

“I don’t pay myself an income. It’s a labour of love,” she states. 

The business is trying a variety of value adds just to get customers through the door and is currently offering free donuts in the mornings just so people will come in and buy a coffee. 

Roxanne states that hiked costs of items such as milk also impacts them, yet the business bears these extra expenses rather than passing them onto the customer.

Accommodation occupancy numbers also largely indicate there are less tourists and visitors in the town. One key accommodation provider noted they are down 10 per cent on bookings compared to last year over the same long weekend. Another has implemented a Friday night ‘one night stay’ to encourage bookings, while comparatively, a third provider commented that guest bookings are steady to almost being up on last year.  

Trading has also been steady for Soleil Skin and Beauty who moved from the industrial area to the main street in Inverloch. 

“We’ve been here for six months and business has increased a lot. Some weeks are good some weeks are patchy, but its been pretty steady,” said Taryn Currie, who also mentioned much of their weekend trading comes from visitors to the area. 

While trading will invariably vary amongst the different businesses, it doesn’t appear that it will be getting any easier soon. 

Outgoings remain high. Spending on gas and electricity rose by 4.9 per cent in the last quarter, according to the Bureau of Statistics and Victoria’s payroll tax is up to a rate of 4.85 per cent. 

The Inverloch Tourism Association (ITA) is batting for these businesses and is focusing on raising awareness of the town and the benefits of visiting and staying longer,including developing digital projects.

The ITA state that individual stores are also adapting product ranges, offering more value adds, adjusting pricing strategies where possible and improving services such as free local deliveries.

“The ITA is focused on a three pillar strategy to assist businesses to remain viable and more resilient through any challenging economic or operating environments,” explained ITA President Glenn Morris. The three pillars are Collaboration, Promotion to increase the visitor economy and Regeneration. 

The ITA has also developed and implemented online forums and networking events for local businesses to share highs and lows of recent trading and current issues impacting their businesses, to help keep business owner’s morale high.