What is happening to Australian retailers? Is this the end of an era? 11



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Just last week we reported Dick Smith had gone into voluntary administration, a shock for many consumers. However that was not the only retailer that collapsed – just a few days later iconic brand Laura Ashley also was placed into administration.

It makes us wonder: what is happening to Australian retailers? Is this the end of the era?

It’s no secret that we love to shop Aussie-owned – in fact you, our readers, have told us time and time again that you deliberately seek out local brands when you shop. So why is it that this support isn’t translating into profits?

Well, there’s two big reasons…

1. The online shopping boom

Online shopping has happened in a huge way in Australia. In 2012–13, over three quarters (76 per cent) of Australia’s 15.4 million internet users made a purchase or order over the internet, according to figures released by the Australian Bureau of Statistics (ABS).

ABS Assistant Director of the Innovation and Technology Statistics Branch, David Taylor said, “The most popular types of purchases were travel, accommodation, memberships or tickets of any kind”. We love the convenience and the competitiveness, however now we can see the real price we’ve paid: Aussie stores are shutting down.

2. International players

In the last few years, fashion brands such as H&M, Uniqlo and Zara have made their way into the Australian retail game and are doing amazingly well, so much so that new stores are opening up everywhere, leaving Aussie retailers in their dust.


Now, other retailers are on the chopping block. Vacuum giant Godfreys have this week announced their shares have plummeted after posting a dip in profits. The share price fell almost 31% to $1.10. Net profit for the full-year is expected to be between $8.5 million and $9.2 million, compared to $12 million in FY15.

Commenting on the results, Godfreys’ chairman Rod Walker said: “Clearly this is a disappointing financial result which reflects execution challenges at an operational level, in particular a failure to adequately capitalise on the significant market shift away from barrel vacuum cleaners to stickvacs”.

And the international retailer boom is only going to get worse: “We haven’t yet seen the peak of international entrants,” Bryan Hynes, managing director of AMP Capital told AFR.

“In 2010 we forecast 11 out of the top 25 international retailers would be in Australia by 2020, operating 18 brands and about 180 stores. We haven’t reached that point,” he said.

Mr Hynes said another one or two “significant waves of retailers” wanted to get into the country.

Tell us: do you think this signals the end of the era? Will you try to shop Aussie more often now you have heard about some brands going under?


Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. More and more it’s becoming difficult to buy Australian. One day I may have to move to a small island and learn to be self sufficient.

    1 REPLY
  2. I read somewhere that Australia has been warned of its economic forecast going bleak in 2016.

  3. many small family owned businesses are going to the wall each day they can not compete with the multi-nationals who are being allowed to strip this country bare.

  4. Every time I turn on the news , the share price has fallen again, I am beginning to think it might be best not to watch the news at all at this time, it is certainly not looking good to me. It sounds , feels and smells like recession and if it is so, then more stores will close and more jobs will be lost

  5. I think Australian retailers can be slow to pick up the best goods out there, if they do the price is way above the overseas price. In Canada my son would zoom around with a light weight rechargeable stick vacuum cleaner, it had a spare battery so you could have both charged to do large areas, but he never had to use both while I was there. It was a common brand and was advertised in local Canadian catalogues at $179. Once home I went into Godfreys, that one was not available here, a much inferior one with only one battery was over $450. I know the market in North America is huge and do expect to pay more here. It is how much more that is ridiculous our little caravan around $60,000, in Canada a similar size with added features like pop out sides $15,000. Cars average half the price over what we pay here.

  6. Australian consumers have paid much too much for much too long. Australian retailers have been too slow to react, believing that they were ‘protected’ or ‘safe’ because of Australia’s geographical challenges.

  7. I think that some of our shopping centre’s will become like the USA. I was travelling bus bus thru California about 3 yrs ago and stopped at a large shopping mall midway between San Francisco to Los Angeles. They had market garden stalls outside in the carpark with a couple of outside shops. But once you walk inside it was mind blowing with only about maybe 6-10 shops opened at one end. The rest were emptied with leftover signage in shop windows. I would say there were about 75-100 empty shops on ground & 1st floors. This I presume was once a thriving shopping mall!

  8. Barbara very true, I agree with you. Godfreys are expensive and the quality is not there on some of there items. Then a sale and the price is quarter of what they were selling for previously. How much are the profits??? The same with a lot of shops, too expensive, I usually check Internet first and even then I can find the item cheaper on one site from another, sometimes by $50-100.

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