The downside to retailing this Christmas

It’s been a tough year for a number of Australian retail sectors – which means it’s been a tough year for manufacturers, suppliers, freight forwarders, clearing agents, recruiters and employees.

We live in a very connected and symbiotic business community in Australia. When one part wins, many win. When one part loses, many lose. Earlier this year many of us lost when, among others, Colorado, Satch Group and Bauhaus group were passed into the hands of receivers.

A few weeks ago, I wrote about the significant difference in confidence between US and Australian shoppers in the run up to Christmas and the holiday season in each country. Through the comparison made, I discussed my belief that three or four medium-sized retailers in Australia would “close their doors or change hands,” in business parlance “go into receivership.” I wrote, “Australia is struggling at retail because Australian shoppers are still too cautious to spend. We have no confidence in the future. We have money in our banks, a strong economy and every reason to spend. Bar one: Confidence in ourselves and in our country. That’s a marked contrast to shoppers in the US. The Conference Board Consumer Confidence Index increased to 56.0 in November up from 40.9 in October.

“Between New Years Day and mid-January 2012 several smaller and mid-sized retailers in Australia will close their doors or change hands.”

“It won’t be the severe fallout we saw in late 2008 and early 2009. Rather, it will be the last sigh and final death of the 2008 GFC on retailing in Australia. Sadly for those two or three retailers, it needn’t be this way.”

“I hope I am wrong. But only a mind shift between now and New Year’s Day will change that.”

Sadly, I was right about the outcome, but the timing was earlier than I predicted; 93-year-old Fletcher Jones was passed into the hands of receivers last week.

Now I don’t know of these things because I am prescient. I know of these things because the business community talks and shares observations and news on the good and the worrying trends and developments in our retailing community. And the community believes that unless there is a shift in confidence before Christmas another three retailers will not make it.

This week almost 16 billion dollars will be paid out in dividends from Australian shares. These funds will hit super funds, family trusts and individuals’ bank accounts. It would be good for all of us if some of it found its way into gift giving over the next four weeks.

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.