Post by Deleted on Sept 2, 2018 7:21:09 GMT 7
Government deliberately crippling retail businesses
Everything our Governments have been doing from freezing social security payments, robo debt clawback, moving sole parents to Newstart to cutting penalty rates, and giving tax breaks to the rich is counterproductive to keeping businesses open... Private Sector Businesses rely on the spending of the masses... those at the very bottom spend everything they get... they are who prop up and grow the economy... not those that save, they drain money from the economy... a capitalist economy relies on spending... an economy is built from the very bottom up. They are not saving the Government or the country money by chasing a surplus... they are the currency issuer... they are destroying the economy. - AWN
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Why Aussie retailers are being forced to shut their doors at an alarming rate
This year to date, more than 1000 Australian retail workers have already lost their jobs as online shopping and tightening wages spell the end of the classic department store.
Cut-price online discounting and better unique in-store experiences from smaller operators means Aussie retailers occupying the middle of the market – with prices that are neither too high, nor too low – are being forced to close in droves.
Kim Do, senior analyst at research firm IBISWorld, told 9Finance that it wasn't the format of the classic big department store that was turning shoppers off. It was the price.
Australia's 'big two' department stores Myer and David Jones have both been struggling to return to profit.
"Retailers have to find ways to entice customers that is not based on price," Do explains.
"What we're seeing is a trend called market polarisation: where luxury retailers and budget retailers are doing well, but the middle of the market is really struggling."
Do said the trend was becoming remarkably apparent in sectors like fashion where consumers have more choice than ever before.
"Take the average person's wardrobe," explains Do.
"What we're finding these days is that people are filling their wardrobe with cheaper clothing that they bought at fast fashion stores or online, and then complementing their base style with a high-end piece, like a Luis Vuitton bag."
The mid-market struggle is most evident in Australia's largest two department stores: David Jones and Myer.
After a disastrous Christmas and Boxing Day sale period, Myer hit crisis mode. CEO Richard Umbers quit his position effective immediately and a month later shareholders learnt the department store was desperately trying to plug a $476.2 million hole in its bottom line.
David Jones fared equally as poorly.
Earlier this year DJs’ South African owner Woolworths announced it was writing down the value of the once-profitable department store by $712.5 million, citing falling sales.
A week ago, it was revealed David Jones' total sales decreased by 0.9 percent and comparative sales decreased by 0.4 percent, as shoppers rushed to places like Kmart to buy traditionally high-ticket items such as homewares.
According to IBISWorld data, the sheer revenue collected by the department store industry is forecast to drop by 0.9 percent, every year for the next five years.
Even more worrying is adjusted operating profit margin – which essentially is pre-tax figure of how much money department stores are making off every item – decreased by 35.4 percent in 2017 to 2018.
To turn their fortunes around, Do said mid-market retailers needed to completely re-design the experience of going shopping.
"What we expect over the next five years is that stores will begin shrinking their footprint. Physical stores are going to act more like showrooms, where shoppers can understand the brand and connect with the product," said Do.
"I know a few retailers who stop selling things in store, instead offering a tablet where shoppers can buy things online and have them sent to their house.
"At the end of the day consumers still want to feel and touch a product before they purchase."
Retail expert Brian Walker agrees with Do's analysis, arguing the days of mega-chain department stores are numbered.
"In retail, the old mantra used to be that size matters. Now we're increasingly telling businesses that size is important, but customer segmentation and experience is far more valuable," Walker told 9Finance.
"We're seeing a real shake-up of physical retailers, where in-store shopping will become less of a transactional buying experience and more of an entertained, immersive trip out."
Retail's horror 2018:
January 2018: American fashion giant GAP forced to close its doors
January 2018: Munro Footwear Group closes Diana Ferrari retail stores
January 2018: David Jones written down by $712.5 million after dire sales
February 2018: Myer CEO steps down after disastrous Boxing Day sales
March 2018: Donut King owner RFG to close 200 stores
May 2018: Esprit shuts all 67 Aussie stores, axing 365 jobs
May 2018: Aussie fashion brand Metalicus enters voluntary administration
June 2018: Toys R Us goes bust, putting 700 employees out of work
August 2018: Sumo Salad enters voluntary administration
August 2018: NSW furniture retailer John Cootes forced to close, axing 135 jobs
August 2018: Online footwear retailer Shoes of Prey enters voluntary administration
m.facebook.com/story.php?story_fbid=2211360092467346&id=1415019052101458
Everything our Governments have been doing from freezing social security payments, robo debt clawback, moving sole parents to Newstart to cutting penalty rates, and giving tax breaks to the rich is counterproductive to keeping businesses open... Private Sector Businesses rely on the spending of the masses... those at the very bottom spend everything they get... they are who prop up and grow the economy... not those that save, they drain money from the economy... a capitalist economy relies on spending... an economy is built from the very bottom up. They are not saving the Government or the country money by chasing a surplus... they are the currency issuer... they are destroying the economy. - AWN
.
.
Why Aussie retailers are being forced to shut their doors at an alarming rate
This year to date, more than 1000 Australian retail workers have already lost their jobs as online shopping and tightening wages spell the end of the classic department store.
Cut-price online discounting and better unique in-store experiences from smaller operators means Aussie retailers occupying the middle of the market – with prices that are neither too high, nor too low – are being forced to close in droves.
Kim Do, senior analyst at research firm IBISWorld, told 9Finance that it wasn't the format of the classic big department store that was turning shoppers off. It was the price.
Australia's 'big two' department stores Myer and David Jones have both been struggling to return to profit.
"Retailers have to find ways to entice customers that is not based on price," Do explains.
"What we're seeing is a trend called market polarisation: where luxury retailers and budget retailers are doing well, but the middle of the market is really struggling."
Do said the trend was becoming remarkably apparent in sectors like fashion where consumers have more choice than ever before.
"Take the average person's wardrobe," explains Do.
"What we're finding these days is that people are filling their wardrobe with cheaper clothing that they bought at fast fashion stores or online, and then complementing their base style with a high-end piece, like a Luis Vuitton bag."
The mid-market struggle is most evident in Australia's largest two department stores: David Jones and Myer.
After a disastrous Christmas and Boxing Day sale period, Myer hit crisis mode. CEO Richard Umbers quit his position effective immediately and a month later shareholders learnt the department store was desperately trying to plug a $476.2 million hole in its bottom line.
David Jones fared equally as poorly.
Earlier this year DJs’ South African owner Woolworths announced it was writing down the value of the once-profitable department store by $712.5 million, citing falling sales.
A week ago, it was revealed David Jones' total sales decreased by 0.9 percent and comparative sales decreased by 0.4 percent, as shoppers rushed to places like Kmart to buy traditionally high-ticket items such as homewares.
According to IBISWorld data, the sheer revenue collected by the department store industry is forecast to drop by 0.9 percent, every year for the next five years.
Even more worrying is adjusted operating profit margin – which essentially is pre-tax figure of how much money department stores are making off every item – decreased by 35.4 percent in 2017 to 2018.
To turn their fortunes around, Do said mid-market retailers needed to completely re-design the experience of going shopping.
"What we expect over the next five years is that stores will begin shrinking their footprint. Physical stores are going to act more like showrooms, where shoppers can understand the brand and connect with the product," said Do.
"I know a few retailers who stop selling things in store, instead offering a tablet where shoppers can buy things online and have them sent to their house.
"At the end of the day consumers still want to feel and touch a product before they purchase."
Retail expert Brian Walker agrees with Do's analysis, arguing the days of mega-chain department stores are numbered.
"In retail, the old mantra used to be that size matters. Now we're increasingly telling businesses that size is important, but customer segmentation and experience is far more valuable," Walker told 9Finance.
"We're seeing a real shake-up of physical retailers, where in-store shopping will become less of a transactional buying experience and more of an entertained, immersive trip out."
Retail's horror 2018:
January 2018: American fashion giant GAP forced to close its doors
January 2018: Munro Footwear Group closes Diana Ferrari retail stores
January 2018: David Jones written down by $712.5 million after dire sales
February 2018: Myer CEO steps down after disastrous Boxing Day sales
March 2018: Donut King owner RFG to close 200 stores
May 2018: Esprit shuts all 67 Aussie stores, axing 365 jobs
May 2018: Aussie fashion brand Metalicus enters voluntary administration
June 2018: Toys R Us goes bust, putting 700 employees out of work
August 2018: Sumo Salad enters voluntary administration
August 2018: NSW furniture retailer John Cootes forced to close, axing 135 jobs
August 2018: Online footwear retailer Shoes of Prey enters voluntary administration
m.facebook.com/story.php?story_fbid=2211360092467346&id=1415019052101458