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Worst Christmas in 34 years – Humbug!!!
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Worst Christmas in 34 years – Humbug!!!
Posted Date: 07/02/2012
By Peter James Ryan


I woke up Tuesday to be bombarded by headlines in every major main media that we had just witnessed the worst Christmas at retail in 34 years.

Very scary indeed – if it were true. The truth – if anyone is interested in hearing it – is the opposite.

According to the most recently released official ABS All Retail Sales data, December 2011 was actually three per cent better than December 2010 in physical retail. In addition, online retail (which accounts for an estimated six per cent of additional retail spend) is believed to have increased somewhere between 28 and 30 per cent this past December.

Combined, the retail dollars taken in December 2011 are more than five per cent up on the previous Christmas. Far from being the worst in 34 years, sales are actually at an all time record in dollars spent at the tills. ABS data also tells us that general household consumption is up by a total of seven per cent over last year.

The major retailers and shopping centre operators I have spoken to have all relayed stories of a healthier Christmas sales period than the previous year.

Far from advocating a cut to the cash rate, taken on these numbers in isolation, the Reserve Bank should be lifting interest rates. The thing that saves an interest rate increase is the level of inflation being so low due to relentless discounting led in particular by the pricing battle to the death between Woolworths Group and Wesfarmers Retail.

The simple lesson here – stop consuming main media and looking to journalists to tell you what is going on in retail because they either don’t know or are making up headlines deliberately constructed to create fear.

Retail is going through another step change period. These have happened with regularity through the 3000 year history of our industry. This one is a big one. But you can’t solve the problems facing your business without getting the facts straight to understand the true context you are facing.

Australia has relative full employment for the economic model we operate under. Any retailer worth his salt will tell you the casual labor pool is at an all time low right now.

Household income is up by nearly four per cent. Debt is down not because consumers have suddenly become spend thrifts but because a) the financial services industry has pushed toward debit facilities post the so-called Global Financial Crisis and b) the financial planning industry has abandoned its radical leveraged equity pursuit that saw a multitude of Australian’s superannuation wiped out or severely damaged in disasters like the collapse of Storm.

The problems with physical retail today do not lie at the feet of consumers. Consumers behave and react in the context that faces them and as a result of 6 million years of evolution.

The problems with physical retail lie at our feet. We are the ones who need to rise to the challenge of persuading consumers to spend their time and their money – in increasing amounts and with increasing margins – with us.

* Peter James Ryan is chief navigator at Red Communication Australia.
Comments:

Wednesday, February 08, 2012 by Peter M Smith
I have never read such a load of BS. The ABS obviously is selective of who they talk to. I have one service industry store and have run this business since 1992, last December was the worst trading December I can remember or prove with sales figures.
I believe the auther and the ABS are commpletely out of contact with reality.
Wednesday, February 08, 2012 by Ellen Kop
I work with a lot of independent Retailers around Australia, and own a 34 year old business myself. I have heard of only 1 that was up last financial year, but had a dog Christmas. Mine was 25% down on last years... a record low of over 10 years, the "so called Global financial crisis" left my top 50 customers: 1 mill lost in super, 1/2 a mill for many, 70% of one's portfolio, a number meant to be retired in their "plan" by now, but now can't, many husbands made redundant, traffic flow all time low across Australia, price checking & justifying purchases, when prior never was... consolidating staff, buying less, Suppliers feeling the squeeze... A lot of Apparel Suppliers are still owed payments by hundreds of Retailers for last Summer's stock deliveries.... & if you don't like the "increased margins" by the retailers, talk to the Government about our import tax & 1/11th we need to pay for GST!
Peter, I suggest you go have a "chat" with your local shop keepers!
Elle
Wednesday, February 08, 2012 by Ken
I think the ABS is a load of BS and should be canned. They appear to select there figures from those that claim to have done well. It is financed by Government and the gov want the best promoted to make them look good. It is called selective reporting. Just like climate change, The Gov do not show both sides of the story. It was the worst Christmass trade in 10 years for me.
Wednesday, February 08, 2012 by Jane
Quoting ABS figures Peter is akin to saying everyone is Melbourne thinks and acts the same- obviously not right. So why would you think that broad brush stats translate to fact for every type of retailing. Its a slop of figures. The truth is as Patricia says to be found by digging into the figures. Which areas are and are not working, is it sustainable, is it linked to other sectors, where are the ops. Retail is alot about the way consumers think and feel,get spooked, feel elated etc The best sevice actually won't up the figures as this is what customers equate as 'meeting their expectations', and they still will want it exceeded, as is human nature. Also want the price to be the best etc etc, nothing new here. The challenge is to be creative to deliver a mix of it all. When will the commentators actually put their 'great expertise' to the real test and offer some suggestions other than all the stock standard classroom ones tossed around that real retailers play with all the time.
Wednesday, February 08, 2012 by Patricia Roberson
Do you or ABS really talk to all retailers I bet you dont I have not had ABS in my store for more than 5 years I have 2 stores and have had since 1999 and this was one of the worst christmases I have seen
All my reps that are Sydney based are all saying their sales are down
If their sales are down then Retailers in the Kitchenware Giftware are not buying How come Meyer went into panic mode and reduced stock as it arrived I think its time to stop blaming and work on customer loyality and SERVICE My experience with Freedom and Harvey Norman Is Nil service and this was over a period of 6 months of visiting both stores

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