‘Perfect storm’ for retail sector

Australian retailers are in for a white knuckle ride in 2012…

This year promises to be another year of living precariously for retailers, with the perfect storm brewing over the Australian retail industry, according to Inside Retail’s annual Australian Retail Outlook 2012.

Factors contributing to Australia’s volatile retail climate include diminished consumer confidence, an unstable federal government, global economic conditions, technological change, and increased costs of doing business.

General Pants CEO, Craig King, says that looking at Australian retail’s high cost model, it’s a wonder the industry continues to exist in this country.

“The world is getting smaller and low cost models are crossing our borders. It’s hard to imagine there won’t be a correction of sorts at some time,” predicts King in Australian Retail Outlook 2012, published today.

King isn’t alone in his strong opinions of Australian retail.

John Gillam, MD of Bunnings, tells Australian Retail Outlook 2012 that the “Federal Government needs to think hard about what it should be doing to make sure that one of Australia’s largest employing sectors is not disadvantaged by ill thought through-policies”.

Featuring predictions on Australian retail from Dene Rogers, MD of Target; Chris Beer, CEO of Luxottica; Paul Greenberg, founder of Deals Direct; Ant Elliot, MD of Glue Store; King and Gillam, among others, Australian Retail Outlook 2012 provides a definitive guide for the year ahead and a look at the year past.

Australian Retail Outlook 2012 puts the spotlight on retail pharmacy, leasing, supply chain, and food retailing, as well as looking taking a look at the headline trends of 2011 and the forces set to influence the 2012 retail environment.

In addition, Australian Retail Outlook spoke to more than 500 Australian retailers in a survey revealing the views of those in the thick of it, on issues as diverse as business strategy, e-commerce, international competition and leasing.

Responses were frank and comprehensive, with 33.1 per cent of respondents believing conditions in 2012 will become a little worse than in 2011, and 7.4 expecting the retail climate to become a lot worse in 2012.

Despite this, 29.6 per cent of Australian retailers say they believe conditions will improve a little, while 27 per cent think trading conditions will remain the same as 2011. Just 2.9 per cent are expecting to see a big improvement in trade.

Some of the most telling responses to emerge from Australian Retail Outlook’s survey of retailers came in regard to the mounting challenges of discounting, consumer confidence, and online retailing.

“A lack of fresh ideas in retail spaces, plus rude, unfriendly staff,” were cited as detractors of retail by one retail respondent, while another commented, “there is no consumer confidence, with neither political party doing anything to remedy this”.

But Chris Beer, CEO of Luxottica Asia Pacific, told Australian Retail Outlook, “to be frank, if many retailers put the effort into focusing on their business rather than complaining, opportunities will come”.

Inside Retail’s Australian Retail Outlook 2012 report can be purchased at RetailBooks.com.au  for $110 each or $270 for three copies.

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