The grim retail reaper
Reading Inside Retail on Wednesday, we learned about the demise of Payless Shoes and Pumpkin Patch. We also read about Billabong’s woes – come on Billabong, I have been in retail for a while now and how often have I heard the weather blamed.
But the bad news gets worse. Westpac has some bad news for Australian retailers ahead of Christmas – and – could this be the end of Big W?
But is it better anywhere else in the world?
If it feels like a lot of retailers are closing their doors recently, it’s not your imagination. Here is a list of just some of the chains which have either gone out of business or engaged in extensive store closings over recent months in the USA:
- Sports Authority – 460 stores Out of Business
- Sports Chalet – 47 stores out of Business
- Macy’s – Closing 100 stores
- Walmart – Closing 154 stores
- Kmart – Closing 78 stores
- Walgreens – Closing 1000 stores
And in Hong Kong, the retail property market has braced for more bad news… after prime rents have already collapsed up to 70pc.
And in Canada, the retail forecast has bad news for Canadian shopping malls.
And in South Africa – more bad news as the retail sector’s growth rate has halved.
Well, who said we were talking up the bad news? If we carry on this way we will most certainly talk ourselves into gloom, doom, depression, despondency and bankruptcy.
Yes – I know there is no news like bad news to attract attention – just look at the TV tonight or any other night.
But regrettably this bad news seems to be common across the globe and we cannot shrug it off and bury our heads in the sand. We need to ask ourselves “What is going so horribly wrong?” And more importantly “What, if anything, can we do to fix the malaise?”
Firstly internet sales will cop it as a major reason and justifiably so. Then worldwide uncertainty. And the shift in spending from material goods to lifestyle spending. What about climate change?
Well all these things are largely beyond our control so to feed these to the press or indeed to the shareholders is an ideal way of shedding any blame. And there is nothing we can do about it.
Just maybe there is some truth in these causes of retail woes worldwide. If the woes were confined to one country we could perhaps set about identifying the causes. But with the bad news being so rampant, maybe we need to take a step back and accept that retail has been and is doing it tough almost everywhere you look.
Horror of all horrors, maybe it is time to face up to downsizing. Our obsession with year on year growth is under fire. CEO’s need to front up to the board and shareholders and tell them like it is and the board and the shareholders need to resist the temptation to fire the CEO.
Is it better to be realistic and cut your expectations and remain profitable, albeit less profitable, or is it better to blindly continue optimistically and go out of business?
Maybe it’s time to pull in our belts, weather the storm and if the storm doesn’t pass, we are at least geared up for the new climate of retail.
Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at [email protected] or 0414 631 702