Australia’s retail market has taken a major turn as more than 170 stores are closed this year.
Household names such as Harris Scarfe, Bardot, Roger David and Napoleon Perdis have fallen as files last year with dozens of stores closed, resulting in heavy job losses.
Experts claim that this could be the tip of the iceberg, as consumers are increasingly focusing on online shopping about bricks and mortar stores.
Australian retail growth has been at the worst level since the recession in the early 1990s and international giants such as Amazon and Aldi are threatening to foster turmoil.
Experts have warned that Bardot and Harris Scarfe are just the beginning of the demise of major Aussie brands
Australia is on its way to a retail apocalypse that could even kill Myer, who closed his shop in Hornsby, Sydney, after serving customers for 40 years
Entrepreneur Dick Smith believes that the outlook is so bad, notable collapse will accelerate until little is left.
‘Job loss is worrying. We have planned 170 retailers to close just two weeks in January this year, “he said today.
In a conversation with Daily Mail Australia, Smith said that internet companies had caused the retail disaster.
“We will end up with only Amazon and Aldi and in principle all Aussie companies will go bankrupt,” he said.
“All those famous brands will disappear. Some of them may exist only in name, but will be taken over by foreign companies. “
Smith watched the electronics chain that bore his name in 2016, decades after he sold it in 1980. The collapse was one of the biggest failures in Australia.
Harris Scarfe, founded in 1849, also surprised consumers when it entered administration last month and is now closing at least 21 stores.
Australia is on its way to a retail apocalypse by ruthless invaders such as Amazon and Aldi and there is nothing that can stop them, an expert claims
Household names such as Harris Scarfe, Bardot, Roger David and Napoleon Perdis have declined in the past year as stocks have fallen with dozens of stores closing and heavy job losses
The businessman was skeptical that even giants such as Coles, Woolworths, David Jones and Myer would survive.
Dropping like files: some recent Australian victims in stores
2016: Dick Smith, Masters hardware, Payless Shoes
2017: Topshop Australia
2018: Avon, Espirit, Toys ‘R’ Us, Max Brenner, Roger David
2019: Ed Harry, Diana Ferrari, Napoleon Perdis, Beds R Us, Ziera, Bardot, Harris Scarfe
“I don’t know how long especially the big department stores will be able to remain viable, but the writing is on the wall,” he said.
Smith said that an overseas operator was smarter than almost everyone on the Australian market and ruthless enough to crush them.
Gary Mortimer, a retail expert at Queensland University of Technology, said Australian companies were not fast enough to adapt to the changing retail landscape and consumer preferences.
“We’ve seen many market changes in Australia over the last decade, with global fashion retailers entering the market almost 20 years ago and Aldi,” he told 9news.
“We have changes in the consumer and too much choice in the market.”
Entrepreneur Dick Smith believes the outlook is so bad that high-profile collapse will accelerate until few Australian companies are left
He said retail companies needed a strong online presence to compete in the current market.
Myer closed 74,670 square meters of stores in 2015-17 and closed its Colonnades store in Adelaide and Belconnen in Canberra.
The Hornsby store, in northern Sydney, closed on Sunday after 40 years after a depressing fire sale up to 80 percent off.
Bardot will close dozens of stores and make hundreds unemployed, just like with the administration. Pictured: Bardot at the Miss Myer Show Fashion Show
David Jones has been in the hands of a South African conglomerate since 2014 and is struggling just as hard as his arch rival.
While Aldi’s sales increased by 10 percent in 2018 to around $ 9.2 billion and last year opened around 20 stores across the country. Coles was around $ 39 billion.
Amazon Australia sales reached $ 260 million in 2018, the first full year since opening, and are tipped to $ 23 billion in 10 years.
Roy Morgan chief executive Michele Levine said the brands most vulnerable to forced elimination by Amazon were those products that were easy to replicate.
“All brands that are committed will really be in conflict,” she told Daily Mail Australia.
“Those who will survive are the ones who have recorded something special. Something that people will pay more because it is unique or it speaks to them or they fall in love with it. “
Too many retailers are in this space, especially large department stores without sufficient identity, and have resorted to observation discounts just to sell.
Retail expert Brian Walker said that those at highest risk are large fashion chains that have existed for decades because they could no longer rely on their store offerings to beat online rivals.
The Hornsby store, in northern Sydney, closed on Sunday after 40 years after a depressing fire sale up to 80 percent off
Smith said he didn’t know how long the big department stores could remain viable, “but the writing is on the wall.”
‘We see a very clear line between shopping and buying. Buying is the domain of Ali Baba and Amazon, while shopping is inspiring, ambitious and emotional, “he said 9 Finance.
Evans said that large retailers also spend far too much on back-office staff and had to slim down their activities for people with fresh ideas.
Smaller companies, on the other hand, were driven into the ground by landlords and shopping centers that charged far too much rent.
Huge household debts, larger bills and stagnating wages affect spending
Macro market forces also play a role in reducing total retailing – consumers simply don’t spend enough.
Despite record low interest rates, Deloitte Access Economics last year found sales as the lowest since 1990, when Australia was in a recession.
“Stagnant wage growth and weak house prices have limited consumer willingness to spend, while tax offsets and interest rate cuts have not yet translated into sales,” predictor David Rumbens said.
Former Director Richard Evans of the Australian Retailers Association blamed these problems, along with the enormous debt burden of the household.
“The disposable income is not as much as it used to be and household indebtedness is much too high,” he told Daily Mail Australia.
“In addition to paying off these debts, the costs of people, such as energy bills, go up without covering the wages.”
The household debt / income ratio in Australia reached 110 percent in the 2018 financial year – $ 1.10 for every $ 1 earned at work.
Mr. Rumbens said retailers were encouraged by irresponsible spending by Australians and that the gap of 0.6 percent between revenue growth and disposable income growth was unsustainable.
“That difference is quite a change, and it’s fair to say that many retailers have only survived in recent years because we have exceeded our resources,” he said.
“But that ship has sailed now.”