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Retailers Blamed Everything But Themselves. (Read 3083 times)
imcrookonit
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Retailers Blamed Everything But Themselves.
Sep 6th, 2013 at 7:09am
 
For retail, the real trouble's in store

Date
    September 6, 2013
    The Age.
 

Adele Ferguson


Chief executives in the retail sector might be punting on better days once the federal election is over, but a recent set of statistics suggests tepid consumer spending in retail is less about the election and more about them.

In the past week the release of a few sets of figures should be keeping department store chiefs and the heads of other retail outfits awake at night. The figures, including GDP, retail sales and trade figures, suggest they should stop with the blame game and start addressing the real problem: consumers are spending but they are spending elsewhere.      Huh

The most telling were the June-quarter GDP figures, released on Wednesday, which show total consumption spending rose 4 per cent, yet retail spending grew less than half that at 1.9 per cent. Even more telling was that net expenditure overseas was up a whopping 15 per cent.

In a separate report released by Citi, titled What's in Store, total spending on overseas travel topped $35 billion in the past year, which accounts for 12 per cent of all discretionary spending. It said almost a third of Australians took overseas trips in the past year.


Over the past three years, travel has grown by $7.5 billion and it estimates retail spending was cut by $3.7 billion as a result. It says the growth in travel reduced retail spending by 1.2 per cent a year and was a bigger drain than leakage to offshore online shopping.

It says offshore online sales have increased by $252 per person when comparing 2010 to 2013, while domestic online is up $503, with most of the growth coming at the expense of stores, which, according to Citi, have seen sales down $838 over the same period.

The numbers are sobering and when they are put into the context of the latest ABS figures for retail sales, they look even worse for local retailers. Sales flatlined at 0.1 per cent in July, largely due to a 7.9 per cent fall in sales at department stores month on month and 3.4 per cent year on year, seasonally adjusted.

Even more interesting were the trade figures for July, which were ugly but showed a 2 per cent increase in imports on consumer products including toys, books and leisure goods.

Against this backdrop, the Australian dollar has been falling, which makes imports relatively more expensive, and interest rates are at record lows.

Retailers have blamed everything but themselves for the reduced spending that is plaguing Australian outlets. Their latest excuse is the election. They also continue to blame the GST-free threshold on internet purchases, which allows shoppers to buy overseas goods below $1000 in value with no GST charged. But this doesn't explain why people are continuing to travel overseas despite the fall in the Australian dollar. Nor does it explain why people still want to shop at Bunnings and eat out at restaurants.

David Jones boss Paul Zahra attributed its poor results to weak consumer sentiment and an unseasonably warm winter. The department store chain reported sales in the three months to July went backwards, making it the third consecutive quarter of declines in comparable-store sales.      Cry

It helps explain why Citi has put sell recommendations on stocks including David Jones, Billabong, Harvey Norman, JB Hi-Fi, Super Retail Group and Oroton. Myer has a ''neutral'' recommendation.

While the weather, a strong dollar, the election and the online disadvantage due to the GST-free threshold can all be connected to the lacklustre spending on retail in Australia, particularly in department stores, clearly there are other factors at play.

These factors are having a knock-on effect on property trusts with an exposure to retail. For instance, Westfield Group has been offering up to 10 per cent discounts to new tenants. And while retail has been going backwards and small shops have been closing down like billy-oh due to a lack of foot traffic, international shops have been opening in Australia. The latest is Sweden's H&M, which announced this week it would open one of its biggest stores in the world in Melbourne next year.

In the past few years offshore groups including Topshop, Gap, Zara and Costco have all opened stores in Australia. US department store Nordstrom now counts Australia as its second-biggest foreign market after Canada.

Their success takes market share and dollars away from existing retailers. According to the AFR, in its second year Zara's Australian business generated $107 million in sales revenue and a gross profit margin of 66.7 per cent. Ikea and Costco together divert more than $1 billion in turnover a year away from the coffers of Bunnings, Harvey Norman and the supermarket chains. Speciality stores take foot traffic away from the department stores and offshore department stores are shaping up as formidable competitors.

The brutal reality is price isn't the only reason why customers are spending more online, overseas or in other areas. Service still has a long way to go and so does product range, quality and mix. In addition, retailers need to clean out their inventories rather than bring in cheap products during the sales.      Wink

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cods
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Re: Retailers Blamed Everything But Themselves.
Reply #1 - Sep 6th, 2013 at 7:57am
 
SOUNDS LIKE THE LABOR PARTY


Roll Eyes Roll Eyes Roll Eyes
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Pantheon
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Re: Retailers Blamed Everything But Themselves.
Reply #2 - Sep 6th, 2013 at 8:07am
 
6 years of labor and some people wonder why retail are struggling.
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[b][center]Socialism had been tried on every continent on earth. In light of its results, it's time to question the motives of its advocates.
 
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Ex Dame Pansi
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Re: Retailers Blamed Everything But Themselves.
Reply #3 - Sep 6th, 2013 at 8:24am
 
Pantheon wrote on Sep 6th, 2013 at 8:07am:
6 years of labor and some people wonder why retail are struggling.



Further austerity measures are hardly likely to help the retail sector.
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"When the power of love overcomes the love of power, the world will know peace." Hendrix
andrei said: Great isn't it? Seeing boatloads of what is nothing more than human garbage turn up.....
 
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imcrookonit
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Re: Retailers Blamed Everything But Themselves.
Reply #4 - Sep 6th, 2013 at 8:27am
 
Well we told them, didnt we?.  Cut your prices.     Wink 
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Kat
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Re: Retailers Blamed Everything But Themselves.
Reply #5 - Sep 6th, 2013 at 8:34am
 
Pantheon wrote on Sep 6th, 2013 at 8:07am:
6 years of labor and some people wonder why retail are struggling.



That has sweet smack-all to do with it.
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...
 
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Swagman
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Re: Retailers Blamed Everything But Themselves.
Reply #6 - Sep 6th, 2013 at 8:54am
 
Quote:
Well we told them, didnt we?.  Cut your prices.     Wink 


...and ridiculous penalty rates
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imcrookonit
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Re: Retailers Blamed Everything But Themselves.
Reply #7 - Sep 6th, 2013 at 9:30am
 
Penalty rates should stay.  Why take over a billion dollars out of the economy?.  That would not be good for the low income worker, or for that matter retail.     Wink
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BigOl64
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Re: Retailers Blamed Everything But Themselves.
Reply #8 - Sep 6th, 2013 at 9:37am
 
Quote:
Penalty rates should stay.  Why take over a billion dollars out of the economy?.  That would not be good for the low income worker, or for that matter retail.     Wink   



What a brilliant little strategist you are.

The retailers should cut their prices even if intial margins are tight and continue to pay high wages.

It helps if you have zero understanding in primary school maths, for your cunning plan to work


But, for everyone else, it usually means the ends of business and massive unemployment.



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The Heartless Felon
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Re: Retailers Blamed Everything But Themselves.
Reply #9 - Sep 6th, 2013 at 9:40am
 
BigOl64 wrote on Sep 6th, 2013 at 9:37am:
Quote:
Penalty rates should stay.  Why take over a billion dollars out of the economy?.  That would not be good for the low income worker, or for that matter retail.     Wink   



What a brilliant little strategist you are.

The retailers should cut their prices even if intial margins are tight and continue to pay high wages.

It helps if you have zero understanding in primary school maths, for your cunning plan to work


But, for everyone else, it usually means the ends of business and massive unemployment.




Well, Imfullasatick IS a greenie...
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imcrookonit
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Re: Retailers Blamed Everything But Themselves.
Reply #10 - Sep 6th, 2013 at 9:47am
 
Retailers can cut their own cloth.  It is up to them to charge what they like.  However just remember the Australian consumer is wide awake.  Charge too much and they will go elsewhere.  For that matter will maybe not even buy certain things.  As far as wages go, if you want people to work weekends.  Then you pay your penalty rates.      Wink
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Sir lastnail
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Re: Retailers Blamed Everything But Themselves.
Reply #11 - Sep 6th, 2013 at 11:47am
 
Pantheon wrote on Sep 6th, 2013 at 8:07am:
6 years of labor and some people wonder why retail are struggling.


what about 6 years in advancements in online retailing and mobile devices and apps ??
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In August 2021, Newcastle Coroner Karen Dilks recorded that Lisa Shaw had died “due to complications of an AstraZeneca COVID vaccination”.
 
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Sir lastnail
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Re: Retailers Blamed Everything But Themselves.
Reply #12 - Sep 6th, 2013 at 11:51am
 
Quote:
These factors are having a knock-on effect on property trusts with an exposure to retail. For instance, Westfield Group has been offering up to 10 per cent discounts to new tenants. And while retail has been going backwards and small shops have been closing down like billy-oh due to a lack of foot traffic, international shops have been opening in Australia. The latest is Sweden's H&M, which announced this week it would open one of its biggest stores in the world in Melbourne next year.



Like I always say what about the landlords greed  ?
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In August 2021, Newcastle Coroner Karen Dilks recorded that Lisa Shaw had died “due to complications of an AstraZeneca COVID vaccination”.
 
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Kat
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Re: Retailers Blamed Everything But Themselves.
Reply #13 - Sep 6th, 2013 at 3:22pm
 
Swagman wrote on Sep 6th, 2013 at 8:54am:
Quote:
Well we told them, didnt we?.  Cut your prices.     Wink 


...and ridiculous penalty rates



Tell you what, Swaggie.

How about a compromise, eh?

This sounds reasonable....

If you work your normal shifts Mon-Fri, then work on the weekend, you get penalty rates.

If you only work on weekends you do not.

This may already be the case, I don't know. I work at a flat rate, no matter what the day, as a rule.
Some of my employers/customers may like to vary that, so we negotiate.

But, if not, why not? 

Sounds like a win-win to me.
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...
 
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UnSubRocky
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Re: Retailers Blamed Everything But Themselves.
Reply #14 - Sep 7th, 2013 at 10:10pm
 
Quote:
Penalty rates should stay.  Why take over a billion dollars out of the economy?.  That would not be good for the low income worker, or for that matter retail.     Wink   


I don't get penalty rates. Why should retailers?
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