BEST OF THE REST: May 5

May 5, 2011: Maybe it’s due to the Easter break, but there hasn’t been a lot to be fascinated about in the trade websites over the past couple of weeks.

Good riddance, Graeme

Inside Retailing and the business press reported extensively on Rod Sims’ nomination as next head of the ACCC.

A reader comment following the Inside Retailing story gives outgoing chairman Graeme Samuel a poor rating, which many smaller retailers might identify with:

‘Don’t know this guy, but ANYONE would be better than that weakling Samuels (sic). What a do-nothing he was. All he could do is make excuses as the two largest retailers gobbled up even more market share.’

– It’s hard to recall Graeme Samuel doing anything whatsoever to enhance retail competition in Australia, and he was clearly no friend of small business. It seems that because the ACCC has more on its plate that it can handle, Samuel had the luxury of being able to pick and choose issues which he was passionate about – like big business box cartels – and disregard the ones – like big box predatory pricing – he wasn’t committed to. Let’s hope the new bloke brings a new broom with him.

Will Harvey Google?

Harvey Norman announced it was going full bottle into the online channel by July, and Macquaries Securities said good idea, because according to a story inhttp://www.current.com.au, Harvey Norman’s destination model is at risk.

Formerly high margin and high profit categories have been affected by price erosion, so that floor traffic has become essential for maintaining revenues, according to Macquarie Securities analyst Rob Blythe. (The motive behind all those 9 cent print come-ones?). He said that Harvey Norman is bereft of a unique selling proposition, with rivals such as JB Hi-Fi attracting more customer flow through loss leaders and more convenient locations.

‘We have frequently voiced our concerns about Harvey Norman’s Australian franchisee business model,’ Blythe said. ‘Harvey Norman is a destination brand lacking a compelling selling proposition in our view.’

Harvey Norman last week announced total global sales (excluding Singapore) for the nine months to March 31 were up 1.4 per cent, while like-for-like sales were down 3.5 per cent. DSLRs were highlighted as a bright spot for the retailer.

Connectedaustralia.com reported on Google’s entry into the comparison shopping business with Google Shopping. Google Shopping is ‘a product search engine that helps people discover product information online, compare prices and find a retailer from whom they can make a purchase.’

Retailers can sign up to Google Shopping for free by submitting a catalogue of their products to the new Google Merchant Center. Google is such a helpful, generous company. BUT – if you really want it work for you, it will cost: Retailers are also offered the opportunity to advertise their products as an extension to Google Shopping.

Another article in Inside Retailing takes a look at the impact of the high Australian dollaron retailing:

RBS Morgans analyst Richard Ivers said the high Australian dollar wasn’t good news for the retailer, and outlines a dynamic which will be all-too-familiar to retailers of photographic hardware:

‘The market is so competitive out there that it is hard for retailers to increase their profit margin as the cost of the goods that they are purchasing is decreasing,’ RBS Morgans analyst Richard Ivers is quoted as saying.

‘So they have to pass on that benefit straight to the consumers and it’s very hard for them to get sales growth when the price of goods are declining in the order of 20 to 30 per cent.’

Import figures Customs-made!

Smart Company filed a story based on a new Australian Customs document outlining levels of private imports. According to Customs, there will be around 10 million parcels being imported into Australia this financial year under the $1000 GST threshold, which extrapolates to the Government missing out on a potential $100 million in lost GST – a far cry from the $460 million estimated by the Productivity Commission just two weeks ago!

The Customs document is interesting reading: For the 12 months from July 2009 to July 2010, total private imports amounted to $875 million. For the nine months from July 2010 to March 2011, that figure has grown to $933 million – with some 440,000 less consignments.


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