One of the great things about writing for SmartCompany is that the blogs you have written over many years, almost five in my case, are there to be referenced quickly, easily and from anywhere on the planet.
So, having read the news this week that Darrell Lea has appointed a receiver, that Myer has had to make 100 full-time admin roles redundant and that we lost more jobs than we created in June, I looked back to see what was happening this time last year. And having looked back to July 2011, our position in July 2012 should not be a huge surprise because it’s Groundhog Day!
This was part of my blog published almost one year to the day on July 25, 2011:
“There is little doubt it’s been a drab few weeks for retail across the country. Our public company woes have been played out by major ‘discretionary retailers’ like DJs, announcing very poor end of year sales. The ‘tough retailing conditions’ message has not been confined to high-end luxury goods, as it’s also being played out across many other public company retailers and small family-run stores around the country.
“The retailing conditions are tough because we as shoppers are nervous about everything and anything – rising interest rates, the carbon tax, the introduction of flood levies, falling house prices, rising petrol prices, the falling share market and lowered super contributions. Oh, and the potential of real job cuts because retail is slow and weekly pay rates just went up by 3%! Our fears are making us save at a rate not seen for three decades. If these fears are not overcome, our behaviour will lead to a true slow down on the eastern seaboard.”
One year later, our own behaviour, as well as the behaviour of the policy makers, hasn’t changed. We are simply reaping what we have sown. As consumers, we’ve stopped spending on anything we really don’t need or isn’t significantly compelling.
The retail industry has had to cut full-time jobs as another mandatory 2.9% increase in part-time wages has increased costs forcing retailers to cut full-time positions. It’s a funny thing, but in tough times – when our cost of living is falling – everybody is happy to have their wages stand still rather than see a colleague lose their job. But when a retailer has no choice but to raise some wages then jobs have to go.
Over 12 months, the Federal Government hasn’t been able to convince us that all is well in the world. Over that time, we haven’t been able to convince ourselves of this either. The people who manage our super funds have put our money on deposit rather than invest in the companies in our economy. The government has introduced tax cuts to compensate for the introduction of tax increases. The Reserve Bank has lowered rates that remain among the highest in the world. It’s only retailers and manufacturers that have lowered our cost of living over the past 12 months by lowering shelf prices, often by sourcing offshore.
But trust me when I say I am often spectacularly wrong. Below is the ending of that blog 12 months ago…
“But as we move towards summer, Christmas (2011) and the New Year (2012), we will become more familiar with our new costs. We will realise that we have more equity in our homes than last year, not because they’ve risen in value, but because we’ve been paying more repayments than we needed to. We will finally see a rate drop and start to say: What do I want to buy that I’ve been putting off?”
I guess it’s still Groundhog Day?
As CROSSMARK CEO, 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 and across the world. His international career in sales and marketing has seen him responsible for businesses 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.