The Australian Retailers Association (ARA) says it is dismayed at the decision of the Victorian Government to go ahead with two new public holidays for the state, with many retailers expected to be forced close their doors, as a result of two extra days of penalty rates.

The introduction of public holidays on Grand Final Friday and Easter Sunday will increase Victoria’s public holidays to 13 a year – the most of any state.

“These two new public holidays come at a high cost to retail businesses, as it means increased wages as a result of high penalty rates if they are to open,” said Russell Zimmerman, executive director of the ARA.

“Many Victorian retailers have indicated to the ARA that they will have no choice but to close their doors on these two days,” he said.

“Wages can be 50 per cent higher on Easter Sunday and 150 per cent higher on Grand Final Eve. Retailers face the difficult choice between remaining open and paying incredibly high penalty rates, or closing and losing sales or production.”

Grand Final Friday and the iconic annual CBD parade has always been a key event for Melbourne CBD retailers, with increased visitors to the area driving sales. The confirmation of this day as a public holiday will lead to less consumers in the city area.

“Grand Final Friday will have the greatest impact on the profitability of CBD retailers, as workers will not be in the city before AFL Grand Final, diminishing what has traditionally been a peak business period in the Victorian events calendar,” said Zimmerman.

“There will be no wages transfer through higher penalty rates being paid or the traditional net benefit from tourism during AFL Friday as workers and businesses abandon Melbourne CBD to stay at home.”

The ARA is currently engaged in a review of the General Retail Industry Award 2010 (GRIA) with Fair Work, with the view to reducing costs for retailers who trade on Sundays and public holidays.