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big whingeing retailers « Previous | |Next »
July 27, 2011

Australian retailers are a tiresome lot. Sales are down in a two speed economy because consumers are not spending, even though national income is rising from the mining boom in iron ore, coal and gold. Savings are going up and consumer spending is subdued.

The retailers are blaming the high Australian dollar, the GST-free zone for Australians buying goods worth less than $1,000 on international websites; the carbon tax (its not even been introduced) and Julia Gillard herself. It's basically all the governments fault. Bash the Labor government and woe is me is the new corporate game. They're big whingers.

What the Australian retailers refuse to do is to look at themselves. They both missed the online retail opportunity, refused to re-invent the way they do business, and the tried to block it so they could continue with their bricks and mortar business of price gouging the Australian consumers with their huge markups. Australians shopping on overseas websites can be traced to the refusal of importers, distributors and retailers to pass reduced costs on.

The whingeing retailers turned their back on the Internet 10 years ago We are now starting to see the consequences of the internet becoming a shopping mall: the steady demise of the bricks and mortar retail chains with high priced goods (Borders, Angus and Roberston, the rag trade, eg. the Colorado chain). The big retailers--eg., Harvey Norman--- will eventually be forced online kicking and screaming.

| Posted by Gary Sauer-Thompson at 1:01 PM | | Comments (3)


My son is in San Francisco at the moment.
Cooper's Ale is about 30% cheaper there [not allowing for currency rates which make it even cheaper], even tho' its imported from SA.
My US bird book was half the price bought online than here in a local bookstore even allowing for postage. OK thats understandable but my Oz written and printed birdbook is just a smidgin over half the price in SF compared to its cost here.
My German made binoculars cost less to get from the US than here even allowing for the delivery and the tax. And the difference was substantial.
Ms fred buys textile art stuff from the US that is half the price of stuff here, if she can get it here which she often can't.

I weep for Aussie retailers.

Retail is suffering because people aren't spending, but it's also suffering because it refuses to lower prices, insists on at least 100 percent markup regardless, a lot of the smaller shops depend on credit, and they'd rather pay the stupid rents charged by outfits like Westfield than go online.

Wholesalers are also a big part of the problem, getting exclusive distribution rights, then adding their own at least 100 percent markup.

It has a lot to do with high rents and the costs of keeping the doors open.
But many businesses are closing because they dont have the buying power of the big boys so they are priced out of the market.
Here is a recent example.
I went to my local glass/mirror company to buy a large mirror. Their price $150. Went to Bunnings and got the same thing for $78 retail. Which is less than what the glass co can buy it for wholesale. A shop like Bunnings works on turnover. When you buy a drill or such from them. Say its $49. Bunnings makes $1 or $2 profit.
How can a business down the road selling drills compete with that? Its only by better service or (which is happening a lot) by the good will of the locals who want to keep the local businesses from going under. Many shops are only hanging on by the incentives for training kids in cert 3 in retail or hospitality otherwise they wouldnt be able to pay staff.
The government should be commended for this.