Divided we fall: Why retailers must speak with one voice

Through some of the most challenging years for the sector, the retail industry has had way too little bark or bite. Australia’s largest private sector employer – and a key economic driver – has had but a whisper in public debate and little shout or clout in government affairs.

That is not to say the industry associations haven’t tried to make some noise, but they are under-resourced and struggle for authority because none of them can claim to really represent the entire industry.

The biggest single achievement of recent years for the industry associations has been to convince the Fair Work Commission (FWC) to pare back penalty rates. And the industry would probably have lost that gain had Labor won the May federal election.

Labor’s failed campaign was a great escape for the retail industry on many industrial relations issues, but there are still challenges looming as the union movement attempts to effect changes in wages and conditions.

The quest for higher wages

The Reserve Bank governor, the prime minister and his treasurer are pleading for higher wages to kick start the flagging economy – precisely the same argument that the Shop Distributive and Allied Employees Association (SDA) will pursue in the FWC.

Wage-theft legislation is on the government’s agenda too, along with franchising law changes, recycling and waste, and a global trade war that could dramatically impact on the purchasing power of the Australian dollar and the cost of imported products.

Who is actually representing the industry in Canberra?  What firepower – indeed, what credibility does the industry have in the debates, inquiries and decisions that both directly and indirectly impact on retailers, their employees, suppliers and customers?

Arguably the two most potent industry spokespersons are Gerry Harvey and Solomon Lew, both of whom are prepared to weigh in to political debates. Yet their potency is blunted by the fact that they are perceived as big and successful retailers who are simply whinging.

In one of the most detrimental decisions for the industry, Woolworths and Coles quit the Australian Retailers Association (ARA) to form the Australian National Retailers Association.

Australia’s two largest retailers believed they were not getting enough backing from the ARA’s broad membership base and decided they would have more success with their issues in Canberra with an entity composed of the country’s largest retailers.

The Australian National Retailers Association is essentially defunct in large measure because it lacked the authority of representing the entire industry – and, when it comes to politicians, small business matters.

It was nice to hear the monthly commentary on retail sales, but where was the relentless, informed, constructive input to government on issues, technology changes and other challenges confronting the industry?

Eyes on Woolworths

The breakaway was a disaster for the entire industry but especially for the ARA, the only industry body with national coverage, because its budget was savaged to the extent that it had to sell off assets to continue operating.

It is interesting now to see that Woolworths is considering rejoining the ARA because the company recognises the retail industry needs a stronger voice. It seems the other retail members of Australian National Retailers Association, including Bunnings, Kmart, Target, Super Retail Group and JB Hi-Fi, are also mulling over a return to the fold.

The potential membership and resources boost to the ARA is a positive, if not imperative, move for a retail industry that has been largely sidelined on important debates and decisions because of its fragmented representation.

The rejuvenation of the ARA as an effective national body is a crucial move and those major retailers thinking of rejoining need to recognise the value of the smaller retailers and diverse membership as much as their own might and power.

Limits of a national body

It is disappointing that the Queensland-based National Retail Association (NRA) has decided against a proposed merger with the ARA. The association has not completely ruled out a merger or a collaborative working relationship but has concerns at this time about a diminished voice for small retailers and higher costs for staffing a national body.

The NRA, which has attempted to develop membership outside Queensland, has been relatively effective, particularly in training and industrial relations, and is apparently in a sound financial position.

The retail industry needs a strong and effective voice and all players matter, large and small mum-and-dad retailers, as well as franchise and corporate retailers.

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