Small towns in parts of New South Wales are losing essential local stores as tough business conditions leave owners with no choice but to shut up shop.
The farming village of Comboyne on the state’s Mid North Coast has lost its only store that stocks farming supplies.
In March, the Hastings Co-op made the decision to close four retail stores to avoid financial hardship.
Comboyne avocado farmer Gordon Burch relied on the rural store.
He said the store provided more than just supplies in the town of 400 people; it was a social hub.
“We’re going to be missing one of the planks of our lifestyle,” Mr Burch said.
Mr Burch said he would usually take about four deliveries of fertiliser from the co-op a week.
With the store closed, the two-hour round trip to the next nearest store added to his business costs.
“We’re buying an electric car so we can do our trips to Wauchope and Port Macquarie more cost efficiently,” Mr Burch said.
Small business operators in the village told the ABC they’re concerned there will be a fall in customer numbers as people who used to come into town for their rural supplies go elsewhere.
Gift shop and garden centre operator Peter Newman hopes someone will reopen the store to keep money being spent locally.
“Comboyne is a small, isolated community. If one part doesn’t thrive, the whole of Comboyne doesn’t thrive,” he said.
Businesses under pressure
Hastings Co-op has already closed its rural stores in Comboyne and Kew and a hardware and rural supplies store in Wauchope.
A general department store in Wauchope will close in August.
Co-op chief executive Nick De Groot said keeping the stores open would have cost more than $5 million over the next five years.
“It’s a very difficult business climate at the moment. The three years of COVID, significant inflation, and then the interest rates movements have created a flat and fallen retail environment,” he said.
Mr De Groot said he could have ended up struggling with payment defaults if he did not close the three stores.
Businesses crippled by defaults
Nationally, difficult business conditions have led to a record high year-on-year increase in trade payment defaults of nearly 48 per cent, according to Australian credit reporting agency, CreditorWatch.
The agency’s February Business Risk Index found 95 per cent of the more than 400,000 businesses that opened in the 2022-2023 financial year failed.
“There’s only a net gain of [more than] 19,000 new businesses across Australia in a 12-month period and that’s very, very bad,” Small Business Association of Australia chief executive Anne Norder said.
“That is a very negative figure and that is something we have to watch. We don’t know yet whether that is a trend or not.”
A town ‘betrayed’
Like Comboyne, locals in Wauchope are worried about store closures.
Nichole Forrester has relied on shopping at Hasting River Co-op’s Department Store for 25 years.
“It’s just a real betrayal in a way. The [Hastings Co-op was] meant to keep this town as the unique place that it is,” she said.
“They let us down.”
Wauchope’s population is 6,500, but the Department Store’s Facebook followers total 8,200, indicating its popularity beyond the town.
Many are attracted to visit for the store’s unique front window displays.
Business NSW regional director Kellon Beard said the loss of the Department Store and stores across the region would have a negative effect.
“It gives people another reason to leave town, where they’ll spend money in other stores, which has an impact to the local economy,” he said.
Calls to better support businesses
Ms Norder said the Hastings Co-op store closures reflected broader challenges across the country, listing bank branch closures as another issue.
“There’s a whole lot of things that are happening that are going to be negative to small communities,” she said.
“We really need to look at what it is that we can do to make small businesses competitive.”
Ms Norder said one solution to help alleviate pressure on small businesses would be for the federal government to follow in the steps of the European Union, which has a strict 12.5 per cent interest charge on big businesses for late payments.
In December 2023, the federal government announced its response to a review of the Payment Times Reporting Act 2020 and committed to more than $8 million in funding for initiatives to deliver better outcomes for businesses.
It includes increasing pressure on big business to improve payment times by naming and shaming late payers.
It is hoped the reforms will lead to faster payment times, improved cash flow, less paperwork and a reduction in financing costs for business.
