Customers are deserting Palmerston Shops because of the problem, prompting frustrated business owners to call on the ACT government to address the issue.

The government has responded by announcing the car park will be upgraded to include up to 25 new spaces as part of the upcoming budget.

Business owners have told the Sunday Canberra Times the car park currently overflows from 3pm, when parents waiting to pick their children up from the nearby Palmerston District Primary School fill the spaces.

Further groups of parents then drop kids off to attend after-school classes at the Kumon Gungahlin Education Centre, often remaining in their cars for the duration of the lessons and leaving few, if any spaces for shoppers between 3.30pm and 6.30pm.

Capital Chemist owner Tam Le said customers complained about the car park every day.

"We're usually very busy after work, but now it's just very quiet because customers turn around and don't want to shop here," Mr Le said.

"They drive around and around and around the car park and go. They cannot find a parking spot."

Mr Le said with a new pharmacy having opened as an alternative in nearby Crace, his customer numbers were down between 10 and 15 per cent.

Pharmacist Claire Anstie said elderly customers had been reduced to tears because they couldn't find anywhere to park and come in for their medications.

Ms Anstie said parents would regularly park in the spaces limited to 15 minutes for far longer and sit in the car using their phones.

"We've had lots of anecdotal evidence of customers just avoiding the 3-7 time slot for medications, and they will go to other pharmacies [instead]," she said.

Hair Journey owner Renee Thompson said there had been verbal and physical altercations between shoppers and the people who were parking illegally in disabled spaces or by overstaying the 15-minute limit.

"People have commented that they drive around in a circle, can't get a car park and go to the Crace shops and take their business there," Ms Thompson said.

Customers reviewing the Palmerston IGA online said they loved the shop, but hated the hassle of having to battle for a parking spot.

Veronica Williams described trying to park there in the afternoons as "a nightmare".

"If it were fixed, I'd shop there more often," she said.

Because of the parking issue, Tim Eato advised fellow customers: "Don't bother shopping there after 4pm".

Vlasia Pappas also said the lack of parking was a problem.

"If the parking was fixed, I'd definitely go back."

ACT government backbencher Michael Pettersson wrote to City Services Minister Chris Steel urging the government to invest in better parking facilities.

"I have asked the minister to investigate improved signage around the shops, actively monitor compliance with more parking inspectors and provide more car parks in the surrounding area," Mr Pettersson said.

"With the growth of the Gungahlin region, it's important that we support local shopping precincts. I know the government has been investing in local shopping infrastructure across the city, and I'm confident that we can find a solution that will help the local business operators at the Palmerston Shops."

Mr Steel said as part of the 2019-20 ACT budget, the car park would be upgraded to include up to 25 new parking spaces.

"This will particularly make it easier for residents to access their local shops during pick-up and drop-off times at the nearby school," he said.