Aussie shoppers face a wave of price hikes as retailers battle rising costs

• 60% of retailers have increased their prices in the past year

• 37% have increased their prices by up to 10% in the past year

• 46% are planning more price increases in the next 12 months

Retailers are walking a tightrope between rising costs and shifting consumer expectations, as new data reveals 46 per cent of Australian businesses will increase prices in the next year, placing fresh pressure on household budgets.

The research, commissioned by CouriersPlease – Australia’s fastest-growing franchised courier and parcel delivery service – polled 203 retailers across Australia to gauge their pricing strategies amid inflation pressures. It found that 60 per cent of retailers have raised prices in the past 12 months, with 37 per cent increasing prices by up to 10 per cent, and 26 per cent by at least 20 per cent. With inflation still a concern, the price squeeze is expected to continue well into 2025, as almost half of businesses prepare for another round of increases.

Retailers are facing a make-or-break moment,” says Richard Thame, CEO of CouriersPlease. “Many are grappling with unavoidable cost pressures, from shipping and fuel to rising wages. But at the same time, shoppers are becoming more price-sensitive, switching brands or delaying purchases to make their budgets stretch further. This creates an incredibly difficult balancing act; how do retailers protect the bottom line without driving customers away?”

Price hikes on the horizon

Despite the Reserve Bank of Australia (RBA) cutting the cash rate and forecasting inflation could hit the target 2-3 per cent range this year, many retailers remain under financial strain.[1] The survey found 23 per cent of retailers are planning a price increase of up to 10 per cent in the next 12 months, while 23 per cent anticipate more aggressive hikes of 20 per cent or more. 

The survey also found that just a small percentage (12%) of retailers dropped their prices in the past year to stay competitive and in the next 12 months, and 45 per cent will hold prices steady. 

Retail competition remains fierce

The findings come against a period of flat retail turnover that indicates consumer spending may be leveling.[2] The data suggests that many retailers may be trying to offset mounting operational costs, from shipping to wages, despite consumers exhibiting tighter spending patterns.

However, Aussie retailers aren’t just contending with economic pressures, they're also up against global E-Commerce powerhouses such as Temu, Shein, and Amazon that continue to draw customers away from local businesses, while platforms like Etsy, eBay, and Shopify have made it easier than ever for micro-entrepreneurs to launch their own brands.[3] At the same time, resale commerce is booming, as budget-conscious and sustainability-driven consumers increasingly turn to second-hand platforms like Facebook Marketplace and Depop.[4]

“Retailers need to rethink how they deliver value,” says Richard. 

“Loyalty isn't a given anymore, customers have more choices than ever, and they’re willing to switch if a better deal or more convenient option presents itself. If retailers cut prices, they bleed revenue. If they increase them, they risk losing customers who are already feeling the strain of rising costs. 

“The closure of Catch in January further underscores just how competitive the Australia retail sector is right now.[5] We’re also seeing larger chains enter administration as many others grapple with balancing tighter margins, while micro retailers are caught between under-pricing to gain a competitive advantage and raising prices for their very survival,” says Richard.

Larger retailers lead price hikes

The survey also found larger retailers (50+ employees) were the most likely to increase prices, with 70 per doing so in the past year and 50 per cent signaling they plan to increase prices again in 2025. In contrast, micro retailers (1-10 employees) were more likely to decrease prices to stay competitive, though 46 per cent still raised prices.

South Australian and West Australian shoppers hit hardest

State-by-state data shows two-thirds of South Australian retailers (66%) increased prices last year, with 33 per cent doing so by more than 20 per cent. In Western Australia, 59 per cent plan to raise prices in 2025, above the national average of 45 per cent. 

Richard adds that even as households benefit from marginal rate cuts, those savings may not translate at the checkout, given the extreme competition, rising operational costs, and ongoing global supply chain pressures.

What’s next for Aussie shoppers?

“Ultimately, consumers should prepare to see more frequent price adjustments throughout 2025 as retailers try to maintain probability in a highly competitive environment. Those retailers that successfully differentiate themselves through faster shipping, unique products and better customer will be in a much stronger position to navigate these challenges,” says Richard. 

Survey results below:

Q1: With the inflation rate sitting above the RBA’s target, how much have you been forced to adjust your pricing strategy over the past year?

Q2: What is your pricing strategy in the next 12 months?