Kmart managing director Guy Russo says Australian consumers are paying high prices because local retailers have flawed and out-dated business models.
Too many retailers work on a percentage-off model and “price up” products to factor in inevitable discounts or promotions, Russo said according to the Australian Financial Review.
“I’ve only been in this space a few years, but maybe the retail model a lot of retailers are working with is out-dated,” the former McDonald’s chief executive told the AFR yesterday.
“The word ‘sale’ has been destroyed, they’re not sales,” Russo said.
“The best you can offer for consumers is the best price you can 365 days a year, that way the consumer decides when they want to shop.”
The Wesfarmers-owned Kmart MD since 2008 has dismissed retailer’s calls for rate cuts to revive the struggling Australian retail sector.
“The stimulus package is in their hands,” Russo said.
“Instead of looking inside their four walls, they’re looking outside and saying who can we blame for this – the Government, the weather, the economy or Greece?”
“They operate in the same environment as everyone else, and I know the best stimulus I can give is looking after consumers with price and quality,” Russo said, according to the AFR.