Christmas is looking likely to be more expensive for West Australians this year, as businesses struggle to find workers and manage rising costs.
About four in five WA businesses are being forced to pass on cost increases to customers, according to the Chamber of Commerce and Industry WA (CCIWA).
As the holiday season kicks into gear, business is soaring, but skilled labour shortages and supply chain issues are pushing up the cost of business.
It means lower profits for business owners hoping to make the most of a Christmas without masks, capacity limits, and other pandemic restrictions.
Labour shortages and cost pressures bite
Bundles of gifts and festive meals will be on the minds of families, but the economic pressures in WA can be seen in something as small as a cup of coffee.
Within Perth's entertainment district, Huon Thi Huynh has run a small cafe for about five years.
Despite doing her best to avoid passing on cost pressures to her customers, Ms Huynh said she has been forced to up the price of a cup of coffee.
"For about a month now, [I've] increased 20 cents per coffee," she said.
"I chose not to increase a lot, but get more customers coming to the shop rather than increase the price a lot."
Like many businesses on her street, Ms Huynh has a sign hanging out the front of her shop looking for experienced workers.
Kailey Chong, 17, is one of several new recruits being trained by Ms Huynh in the tiny cafe.
"We've been struggling to find someone that's like, long term, and can stay for a long period of time," she said.
Business confidence slumping: CCIWA
Businesses have not been this pessimistic since the beginning of the pandemic, according to the CCIWA's December quarter business confidence survey.
West Australians are expected to spend relatively big this Christmas, but many businesses may not see that translate to an increase in profits, as they pay more to try to keep the workers they have.
"Wages are going up significantly ... and sectors like health care, mining, professional services, all being impacted to a significant extent," CCIWA chief economist Aaron Morey said.
"We are seeing profits plummet really fast amongst the WA business community, particularly SMEs (small and medium-sized enterprises) in retail, in the food services sector."
WA businesses, on average, have offered approximately 11 per cent increases to base wages for existing employees according to the CCIWA survey, compared to the annual WA wage price index of just 3.3 per cent.
The hit to their bottom lines has seen long-term confidence plunge, with only 15 per cent of businesses expecting conditions to improve within the next year.
Mr Morey said the government should try to reduce the burden of payroll tax to help affected businesses.
"Western Australian businesses face the heaviest burden of payroll tax in this country. The state government could relieve that pressure by reducing that burden," he said.
Passing on the cost
Balancing inflationary pressures, skilled labour shortages and more expensive supplies has pushed 79 per cent of businesses to pass on cost rises to consumers, according to the CCIWA.
"It's the small business owner who's really caught in the middle," Mr Morey said.
Among survey respondents, retail trade, food services, and real estate sectors were the least optimistic, with a high proportion of businesses not expecting conditions to improve.
Perth liquor store manager Louise Dawson has struggled to find staff.
"It took me a while to find someone, probably two, three months to find someone just to fill in on Friday and Saturday nights," she said.
Ms Dawson said while business was going well for her, things were not looking so great for some neighbouring businesses.
"Most are hanging in there ... a couple of restaurants have closed their doors just recently," she said.
About half of businesses in the CCIWA's survey also indicated supply chain disruptions as an ongoing barrier to business.
"Definitely some delays in shipping here and there, but we've got our team all working our best to try and ... make sure everyone gets their orders before Christmas," clothing store supervisor Toby Muenchow said.
"I think it's only getting busier. I feel, like, that last minute rush for Christmas. Everyone trying to run in and get last minute presents."
