Traditional bricks and mortar retailers trying to compete with rapidly expanding online outlets are being hampered by red tape, a new report has found.
Retail groups are calling for concerted action by all Australian governments to act on a new Productivity Commission report that's found the industry's costs of doing business are unnecessarily inflated.
The commission found that while retailers' costs are largely market driven, they are also inflated by red tape, such as on trading hours and planning and zoning.
"Restrictions on bricks and mortar retailers' trading hours are increasingly out of step with consumer expectations and the rapid growth of online retailing," commissioner Patricia Scott said releasing the report on Friday.
She said while these restrictions aim to protect smaller retailers, removing trading hours restrictions does not appear to have a material impact on the structure of the retail sector.
It also ignores offsetting gains through lowering costs and increasing the ability to compete with online retailers.
The commission also found that planning and zoning regulations are complex, excessively prescriptive and often anti-competitive.
Ms Scott said with the exception of Victoria, progress by governments to address costly anti-competitive provisions has generally been "slow and patchy".
Australian National Retailers Association boss Anna McPhee called on all state governments to "open the doors" to jobs growth and consumer choice by quickening the pace of reform.
She said current restrictions are complex - such as the difference in hours for the sale of light bulbs versus light fittings.
"There's no doubt a more flexible approach to trading hours would benefit consumers, employees and the broader economy," Ms McPhee said.
Australian Retailers Association chief Russell Zimmerman said there needed to be an "honest conversation" on trading hours, noting many retailers are reluctant to open their stores on a Sunday due to the impact of penalty rates and crippling labour costs.
The report found labour and rent costs as a share of revenue are much higher in Australia than in the UK and US.
Mr Zimmerman was also concerned that while the report found a growing number of businesses are receiving orders via the internet, it labelled 38 per cent of retailers "digital commerce laggards".
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