The other factor raising Australian retailers angst is the prospect of weaker Australian sales, as well as the prospect of more internet-savvy buyers looking for bargains online. According to the SMH, retail sales data for October 2010 dropped 1.1 per cent, when the experts predicted a 0.4 per cent increase. This is more likely reflecting weaker confidence....after all there is still a lot of problems around. The stock market at that time was weaker.
The reality is that just 3% of retail sales are from online sales, with foreign websites probably accounting for 1.5% of sales. The issue is not really whether that is significant or not, or whether retail is 'vulnerable', but whether industry sectors ought to be protected. The answer is no. People ought to pay the price of their bad decisions. As we have indicated, retailers have made large profits over the last decade because they supported the government policy of promoting consumer spending...and now they want governments to subsidise spending...when consumers want to save by getting value for money. If they want sustainable sales, they ought to lobby for government to adopt sustainable policy, and not to excessively spruik home sales/prices. You cannot have your cake and eat it too.
Retail sales will eventually recover....retailers will need however to build an online presence, and foremost an online strategy. They are well-behind in those stakes.
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