Some small to medium businesses are saying they have no choice but to increase prices due to inflation.
More than half of businesses surveyed by MYOB said they will have to increase costs. About 82% said their overhead costs have increased in the last year.
The survey also showed the majority of small to medium businesses have experienced cost increases in the past year on average of nearly $1500 per month.
MYOB spokesperson Anna-Louise Hoffman told 1News the pressures were on top of increases businesses have sustained in the last year.
“It’s quite significant year-on-year jumps that’s compounding their bottom line.”
Precious Metals Group creative director Alicia Platje said: "You’ve got to factor in the staffing costs, cost of goods, cost of supply, shipping and insurance ... the gold price has increased significantly."
Another reason businesses were being hit was because people were spending less – especially on the nice to haves.
“We're looking at alternatives for our customers, we bring in like low something diamonds and muscovitte, to offer an affordable alternative for our customers, to make it easier for them.”
Deborah Bunyard, business development manager at Confinement Escape Rooms, said she had been looking at every part of the operation to find any savings on expenses.
"There's definitely a tightening out there, we get people ringing to ask what the price is a bit more than we used to.”
Both businesses have reluctantly hiked prices recently but hope that’s the last time for a long while.
“Most [businesses] don't want to have to pass costs on to consumers … at the moment with consumer spending so tight, everyone is just fighting for the dollar everywhere they can,” said Hoffman from MYOB.
Another reason for the lack of consumer demand was high interest rates.
The Reserve Bank will make its latest Official Cash Rate decision on Wednesday, with forecasters unanimously predicting it’ll stay stable at 5.5%, due to a large amount of gloomy economic data.
Consumers are being urged to support local businesses to keep them out of tricky situations.
For more on this story from 1News business correspondent Katie Bradford, watch the video at the top of this article.
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