RIP retail Australia (or not)

 

RIP, gravestone, dead, death, dying, grave, cemeteryIt is easier to be pessimistic than optimistic, and one can find stats to support either view.

But here is my take on the retail landscape.

Average of 44 small businesses closing their doors each day, according to Australian Bureau of Statistics (ABS) data.

Small business failures up 48 per cent.

Sales have been flat, like forever: The latest ABS Retail Trade figures show that Australian retail turnover rose 0.1 per cent in November, seasonally adjusted, following a rise of 0.4 per cent in October 2014.

Online eating our lunch: Total online retail trade, in original terms, rose 5.2 per cent in November following a rise of 9.8 per cent in October 2014, and a rise of 8.7 per cent in September 2014.

The consumer is not coming to the rescue: Total household debt stood at $1.84 trillion at the end of 2013, equivalent to $79,000 for every person living in Australia at that time. This was higher than it had been at any time in the previous 25 years, even after making adjustments to remove the effect of general price inflation.

And this won’t change soon: In 2012, Australia’s household debt level was equivalent to 1.73 times Australia’s 2012 gross disposable household income, whereas household debt in both Italy and Germany was less than a year’s worth of gross disposable household income (at 82 per cent and 93 per cent respectively).

Sales growth is declining. Like forever (see graph)

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Our retail landscape is littered with failures: From outright bankruptcy to strategic retreats, and failure defies any classification, as you can see from the range:

Small, Treehouse Children’s Decor; large, Crazy Clark’s and Sam’s Warehouse; food, Pie Face; fashion, Ksubi, Man 2 Man; and homewares, Clive Peeters, and Kleenmaid. Luxury, Perfume Empire; Basics, Payless Shoes; local, Darrell Lea; international, Starbucks, Krispy Kreme; or franchised, Video Ezy.

But the purpose of this post is not to lament the state of the industry, but rather to make the point that failure is a fact of life.

None of those organisations or the people involved with them need to be ashamed of the end result.

The problem with failure is that we run away from it and don’t confront it well enough to actually learn from it.

Over the coming weeks I hope to go some way towards bringing failure out of the closet.

Have fun

Dennis

Ganador: Solutions for Success

Comments

3 comments

  1. Michael Cuda posted on January 19, 2015

    Good article Dennis. Finally some factual evidence ! Hope you had a good Xmas and 2015 is a great year for you... Cheers Michael

    • Dennis posted on January 19, 2015

      Thanks Michael - all good and raring to go for 15 :) - and all the same to you.

  2. Stuart Bennie posted on January 19, 2015

    Scary stuff Dennis but very well put. I agree with almost everything you say with only one minor exception. I think some of those retailers that have closed indeed need to be ashamed. Alas, one retailer that you mentioned declined our offer to talk. We tried again but we were too late. A week later they went belly up. Incidentally prior to this they had retained one of the big 4 for months on end. When will retailers realise that the big 4 know so little about retail. If you investigate the credentials of their "expert retail partner" you will be lucky if they have any retail experience. Perhaps a few weeks at McDonalds!! stuart@impactretailing.com.au

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