A question for the productivity commission?

Michael Luscombe was interviewed by a trio of our top business journos this week for Business Spectator. However, what transpired was a wide ranging and interesting report.

While store expansion and the 50 new large format home renovation/hardware stores was the lead take out, there was a lot of interesting background on Woolworths’ longstanding – and Michael’s current – links to Wal-Mart, as well as views on the competitive retailing environment in Australia across much more than just grocery.

I read particularly closely on the comments about increased staffing levels in Coles, and the number of flexible full- and part-time roles the 50 new large format home renovation/hardware stores will employ.

The 50-store roll out, with a further 100 planned, is hugely noteworthy in Australia not only for us as shoppers but for us as employees. Whether they are directly employed in the new stores; logistics and head office structure that support them; the supplier base, from products to advertising and merchandising services; the local businesses that will build, fixture, paint and keep them clean, it’s all part of the circle of life.

Mrs Moore and I are blessed with two young adults, one girl, one boy. One has just entered the workforce post uni, working in a company that supplies signage to retail stores. The other is studying advertising at uni. Mrs Moore and I love them dearly, but I love them more when they and their friends are in full-time gainful employment and out of our house for 38, but preferably 50, hours a week! Hold that thought.

Last week I’d been asked for my opinion on the continuing roll out of Patrick Noon’s Costco in Australia and found myself quite explicitly expressing frustration with our planning laws. It’s taken Aldi 10 years to build a network of 200 stores, and they do not struggle to access capital, they only struggle with finding sites for new stores, and then gaining DA approval for their development.

On that journey they’ve created thousands of new jobs directly and indirectly, though I don’t how many. Costco could probably move quicker, but access to stores is a problem. The new Woolworths/Lowes joint venture will develop 50 new sites, with a five-year plan to secure 150 sites. Add up the total number of jobs these will create in the build and operate stages and they are significant.

So my frustration is this.

We do have a need for more retail formats with more stores in Australia, and that need isn’t going to go away. The Moores arrived in this, the newly promised land, in 1997 and almost two million people have followed us in. Well not us personally, but you get the point.

We do need new corporate stores because their increased scale, increased innovation and increased competition lowers prices of goods for us as shoppers. Their economic output creates employment from 15-year-olds in their first jobs, to 20-somethings starting their careers working 38, though preferably 50 hours, a week. And that allows the 40 and 50-something’s to enjoy the new found peace in our homes that this brings.

So why is the whole process so slow, so expensive, so confrontational and so mired in secrecy? An agenda item perhaps for Gary Banks’ next meeting as Chair of the Productivity Commission?

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.


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