Business woman Melinda Charlesworth has a standard work-life balance. She’s a full-time employee, providing for herself and her children as a single parent. But this wasn’t always the case. 

In 2016, she took on the challenge of owning a small business. Ms Charlesworth bought a homewares and furniture shop called Nest Emporium, having prior experience as a business advisor for the NSW government she was sure she had things covered.

And in the beginning the little shop nestled in Thirroul was profitable.

But after seven years of managing her pride and joy, Ms Charlesworth shut down in February. The reason was mixed, there was Covid-19 lockdowns to deal with and trying to compete with big businesses’ products. But what ended Nest Emporium is what so many retailers are labouring against – the cost-of-living crisis. 

“By the end, it was soul-destroying,” Ms Charlesworth said.     

It’s not just the Thirroul homewares store struggling during this economic slump. The Australian Bureau of Statistics (ABS) reported a 0.1 per cent rise in month-to-month retail turnover in April. 

Australian retail turnover percentage by UOWTV

The ABS head of retail statistics, Ben Dorber, said the small rise was insufficient to compensate for the 0.4 per cent fall in March.

“Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending,” Mr Dorber said. 

Other Illawarra retailers have noticed a change in customers’ spending habits. Homewares and variety store House 2 Home took to Instagram in March, letting their followers know the shop was at risk of closing. 

House 2 Home’s manager, Cara Lavis, was “shocked” the ABS reported an increase in retail turnover for April. 

“April sales were still down 20 per cent on March,” Ms Lavis said. 

“We’re weekly anywhere between 10 and 20 per cent down on last year, which would have been down on the year before, and down on the year before that as well.”

Ms Lavis said people have shifted their priorities in response to the cost of living crisis and empathises with other small business owners who are struggling.

“You’ve got the customers obviously who don’t have as much money to spend anymore, and they’re being very careful with every dollar that they do spend,” Ms Lavis said. 

“And obviously we’re not a necessity kind of shop, so sales have slowed down on that avenue.” 

The ABS’s latest Monthly household spending release found people in NSW had spent 1.8 per cent less on non-essential items.

Monthly household spending indicator by Kiara

Ms Charlesworth said people’s gift shopping changed last year too. Instead of customers buying a Christmas present for everyone in their family, people were doing a Kris Kringle gift swap with a fifty-dollar budget. 

It isn’t just Nest Emporium’s turnover that was impacted in Thirroul – some cafes have been struggling too. 

“People’s habits have changed. They’re still going out; they’re still doing things. But they’re just spending less when they do it,” Ms Charlesworth said. 

“So, they still get the feel-good of the going out for lunch or going out for breakfast, but they’re not spending as much money.”

The ABS reported a 0.5 per cent decrease in food retail sales and just a 0.3 per cent increase for cafes and restaurants.

Monthly retail turnover by industry by Kiara

The beginning of the end for Nest Emporium was being forced to close for 11 months in total over the COVID-19 lockdowns.

“In the first year, the government was very supportive, and they gave us lots of money and grants and things, and the landlord kind of said yep you don’t have to pay the rent and all that kind of thing which was fantastic,” Ms Charlesworth said. 

“But I think when everyone was doing that, we all thought it was going to be over pretty quickly. 

“And then when it was still going a year later (and) we would have to close again, no one had anything left to give.”

After Covid measures eased, Ms Charlesworth had to pay back what she owed her landlord. But with the interest rates climbing, the business’ takings dropped $100,000 yearly.

“Your costs are going up, your rents going up, your cost of products are going up, your wages are going up,” she said.

“Everything is going up and your income is going down and there was no slowing in that.”

University of Wollongong Associate Professor of Business, Martin O’Brien said employers have had to adapt to a significant wage increase over the last twelve months. 

“Employers have sort of dealt with quite dramatic increases in some of their other inputs, and wages are basically the price attached to labour, which is another input,” Prof O’Brien said.

While the House 2 Home’s Instagram post helped business for a while, it didn’t have a long-lasting impact. Ms Lavis echoed Ms Charlesworth’s experience – customers are spending less and the cost of running a business keeps increasing. 

“Rents are crazy, and then the wages are going up and up, and super is going up, and then you’ve got Eftpos fees (that) are ridiculous, and freight for deliveries, and the cost of the stuff that we order,” she said. 

But Professor O’Brien said it isn’t all doom and gloom. The Reserve Bank’s goal of getting inflation back down between 2-3 per cent is drawing closer and closer, as inflation seems to be slowing down. 

He’s hopeful it will help Australians pay off their mortgages, which will flow onto the rental market. 

“Hopefully the next thing is going to be an interest rate decrease, which is obviously going to help a lot of people,” he said. 

While it’s a positive outlook for struggling businesses, Ms Charlesworth knows other establishments won’t make it or are holding on until their leases finish.  

“I’m seeing business after business after business closing; all you have to do is take a walk down Crown Street and look at all the empty shops, and it’s heartbreaking,” she said. 

“As a retailer…I know that every for-lease sign I see in a shop is somebody’s broken dreams.”