May 07, 2018

Retailers may be doing it tough, but you can’t blame consumers for shopping online

Both in England and Australia I have at times found it difficult to get served in shops.  I once had some shoes picked out to buy that cost $200+ but the only shop assistant there just sat on the phone.  Nothing I said or did would dislodge her.  I walked out of BFS Pedorthics with my money still in my pocket.

I do however have a way of getting served that usually works.  I stand in the middle of the store  and say in a VERY loud voice: "Why am I invisible?".  That gets a pretty quick response usually.  Even in my old age, I do have a Stentorian voice when I choose -- and enough extraversion to use it

Stentorian speech is not aggressive speech. It is not a shout or a scream or a screech.  Stentor was simply LOUD.  Australia actually has a modern Stentor in the person of Michael Darby. Michael rarely uses public address systems. He uses his built-in one. It is a wonder to hear.

Bosses with underperforming shops should mount a close investigation of how their staff are treating their customers.  If they found out, a lot would be horrified, I think.  There are a lot of snooty servers who give the customers the feeling that they are doing the customers a favour by serving them


If you’ve recently been into a Myer outlet and tried to buy something, then you would not have been surprised to read some of its stores are closing.

Australian retailers are having a terrible time, apparently. Conditions are tough and the outlook is grim. In fact, things are so bad that it sounds to me as if the average retailer is almost in as much despair as the average retail consumer.

If you’ve recently been into a Myer outlet and tried to buy something, then you would not have been surprised to read some of its stores are closing. Perhaps you too have played the catch-a-shop-assistant game with Myer’s staff. You search for ages before finally spotting one, whom you approach tentatively, clutching your item.

You ask politely if you can buy it, but your hopes are dashed. This person doesn’t work for the brand that owns your item, someone else does; she is over there somewhere, but she may not be here today, she may work only on other days; whatever, good luck and toodle-oo. With that she disappears and you are left clutching your item, which you put down before going home to buy it online for 30 per cent less, with free delivery.

Myer is only one of the most recent retail casualties and the government’s silly new tax on retail consumers isn’t going to help anyone. Consumers are fed up with poor service, rubbish retail experiences and high prices, and increasingly prefer to buy goods online, especially from overseas.

In the past financial year, Australians spent about $40 million on low-value items (less than $1000) online, offshore. We pay no GST on low-value items, and we pay no other taxes, duties or charges to bring them into the country. However, this is all about to change.

From July 1, retailers will have one of their long-held wishes realised, with GST applied to items under $1000. This will “level the playing field”, apparently, but you and I know it will do nothing except make things more expensive.

Any overseas retailer who is sending goods worth more than $75,000 a year into Australia must collect the GST and pay it to our government, but it is not clear how enforceable this rule may be.

For example, I regularly buy household items from a small vintage boutique in Rodeo Drive, Los Angeles. It is difficult to imagine that the lovely shop owner with the pout and monster eyelashes might sit down at the end of each quarter, dirty martini in hand, and dutifully fill out her Aus­tralian business activity statement.

In addition to the GST expansion, the Department of Home Affairs is considering whether to slug us all with a new import levy of up to $7. They say this is to cover the cost of screening our items at the border. However, this is just poor management and government gouging, just because they can. Liberal Democratic senator David Leyonhjelm describes the moves succinctly: “Collection of GST on low-value imports will be expensive. It’s stupid policy. The levy idea is even worse.”

Russell Zimmerman of the Australian Retailers Association is a great advocate for the retail sector. He empathises with consumers, but adds: “The cost of doing business is very high in Australia, and this is not just about the high cost of wages. Rent and other costs are very high.”

Indeed, rent is a real issue. Landlords seem unreasonable, even greedy. Prices are exorbitant; a retailer may expect to pay $130,000 a year for a 120sq m shop in an outer suburban shopping centre. Further, the standard retail lease mandates the store has to provide its landlord with its gross sales figures on a reasonably detailed basis every month. These figures must be kept by the retailer for two years in case the landlord wishes to inspect them.

If the landlord suspects the retailer is fudging, they have the right to audit the figures, and if there is a variance of more than a particular percentage, the landlord has the right to impose fines and the retailer must pay the cost of the audit. The average lease for a retail outlet is between five and seven years, as a general rule. Rent increases each year by the consumer price index plus 2 per cent or 2.5 per cent, or 5 per cent compounded year on year. This means that across a five-year period rent rises by about 27 per cent.

Red tape costs a lot of money, too. For example, in Melbourne a large retail outlet opened its flagship store a few years back. For its opening night it wanted to serve refreshments including alcohol. It was required by the local authorities to have a person with a “responsible service of alcohol” ticket. This in itself wasn’t a huge cost but it is indicative of the reach of government, and how almost anything that anyone wants to do is subject to annoying, time-consuming regulation.

In terms of presentation, the Australian retail sector leaves a lot to be desired and this has become more apparent in the past five years. Australians watch many TV shows about renovating, decorating and design. Many of us have beautifully decorated homes now, and we are disinclined to leave our lovely houses to visit cruddy facilities that are visually unappealing. Yet, as Zimmerman points out, when a retailer wants to complete a fit-out, the work must be done after-hours. The cost of paying tradespeople to work nights adds enormously to the cost.

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