The South Australian government's long-running ambition to fully deregulate the state's shopping hours has been dealt a major blow, with Business SA dropping its support and aligning its stance closer to the Opposition.

Sunday trading in Adelaide and Gawler is restricted to between 11:00am and 5:00pm for most larger businesses, with shops in the CBD and suburbs also having to close by 5:00pm on a Saturday, and restrictions on public holiday trading.

Smaller independent supermarkets, however, are allowed to trade outside those hours — exemptions they believe are crucial to remain competitive with major players like Coles, Woolworths and Foodland.

Business SA has previously backed the government's push to deregulate shopping hours, but chief executive Martin Haese today told ABC Radio Adelaide that after talking with thousands of small suppliers, it had changed its tune.

"If there was total deregulation, what would that do to the suppliers who are supplying the supermarkets around South Australia?" he said.

"Their suppliers, the thousands of small businesses, are too small to supply a large national/international supermarket, but they can get in the door of a smaller one, and they're the ones whose back we're looking after."

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Mr Haese said full deregulation risked "rationalising the market in favour of the big players" at the expense of smaller businesses.

Business SA (the state's Chamber of Commerce and Industry) instead will support partial deregulation, which would allow all businesses to trade an extra hour on Saturday until 6:00pm, open two hours earlier on Sunday at 9:00am and open on Boxing Day.

The new stance pulls it closer to the Labor Opposition, which supports the extension of Sunday shopping hours but not public holiday trading.

Treasurer holding fast

While the Liberal Party took deregulation to its win at the 2018 election, it has failed to get it through parliament.

Treasurer Rob Lucas has instead been granting exemptions to trade on public holidays, including Boxing Day.

He said the government did not need Business SA's support to keep pushing for deregulated hours and "respectfully disagreed" with its views.

"Our policy was never designed for Business SA," Mr Lucas said.

"It's designed for 70 per cent of family households that actually strongly support greater freedom of choice."

He pointed to a survey of 501 metropolitan Adelaide residents released Monday by the Shopping Centre Council of Australia and the National Retail Association that found 75 per cent of adults believed in extending at least some shopping hours.

The survey also said:

• 63 per cent wanted earlier Sunday trading
• 57 per cent wanted longer Saturday afternoon trading
• 44 per cent supported increased public holiday trading
• 23 per cent wanted shops to be open on Good Friday

A total of 61 per cent wanted a referendum on the matter — a scenario Mr Lucas proposed earlier this year — while 90 per cent said they would continue to support independent retailers regardless.

"We'll continue to maintain our position and take that argument through to the March election, indicating to people that if they want to support a policy that allows people to shop on Easter Mondays, Boxing Day, public holidays like that, then it's the Marshall Liberal government that's going to offer that greater freedom of choice," Mr Lucas said.

Survey proves lack of support: Labor

But Opposition Leader Peter Malinauskas said the survey proved the majority of South Australians did not support total deregulation.

He said he was grateful for Business SA's "leadership".

"I think Business SA have done what the Liberal Party have failed to do, and that is to get out there and talk to industry and small business in retail and understand just exactly what the implications would be of Steven Marshall's total deregulation policy."

Most country towns have deregulated shopping hours, apart from Millicent and some much smaller towns, where 80 per cent of residents voted against relaxing shopping hours in 2017.