Retail Wreckage

I can't remember when the retail sector last strugged as hard as it is now. It's almost painful to watch as retailer after retailer enters voluntary administration or liquidation. The last few years have been particularly bad.

There are so many empty shopfronts in my neighbourhood and the only word I can find to accurately describe the current situation in retail is "wasteland". It is as grim as it's ever been.

The latest company to fall victim to the dismal retail operating conditions is Harris Scarfe, which was placed into voluntary administration today. More than 1800 jobs are at risk across the country at its 66 stores.

Obviously the high level of household debt combined with stagnant wage growth is underpinning the lacklustre performance of the retail sector. Recent interest rate cuts appear to have provided no relief.

The big question is, are we at or near bottom? Where will the retail sector be in 12 months and is it undergoing some kind of fundamental transformation as retailers head online in droves?

Interesting times for sure. I'm very curious about this year's Christmas retail figures. That will be a good gauge as to where we are in the great scheme of things and perhaps an indication of where we are headed.

That was a surprise indeed. I thought Harris Scarfe might be one that is spared and survive through the difficult retail environment.

Looking at the share price over the last few years, I think TRS is just hanging on as well, although there is a rally in the last couple of days.

Bricks and mortar has a use-by date. E-commerce doesn't involve exorbitant rents. Retailers aren't seeing this - they're too busy trying to make the problem worse by bashing wages.

Don't have a lot of sympathy to be honest.

Had cause to venture into some of the major shopping centres in Q'ld and NSW recently. Shop after shop of women's fashion shops, many with not a customer in sight. We have seen this often and having a good idea of the rents paid, I can only wonder how small their bottom line must be, if they are in the black that is. We have been into the local Harris Scarfe often and it never gave me the impression of a business going wrong.
It would be interesting to see how Greenlit Brands' other business are going -
Fantastic Furniture, freedom, Snooze, Best & Less, Plush, OMF

greggles said:

I can't remember when the retail sector last strugged as hard as it is now. It's almost painful to watch as retailer after retailer enters voluntary administration or liquidation.

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"Big" things going broke and/or a large number of workers being put off in one go and making the news headlines is one of the defining aspects of a recession once it starts becoming common.

I'm very curious about this year's Christmas retail figures.

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In that regard I find the timing extremely interesting and perhaps somewhat telling.

To fail at what should be the high point of the year implies that the money wasn't rolling in to the extent they'd expected it would?

Back in the 80s there was a gym on every corner. Not long after things blew up.
"Peak gym" (a scientifically proven indicator) is a way to tell when recession is truly on its way. I believe we have already hit peak gym and have been on the slide for a bit.

On another note:
My favorite thai bakery just shut down in Sydney. The cakes were delicious. All my favorite eateries always bear the brunt. In the end we will be left with maccas and sub par cafes.

I'll spend the next few weeks eating at all my favorite places before they shut down.

moXJO said:

I'll spend the next few weeks eating at all my favorite places before they shut down.

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How about you just eat at the crap ones that way the rest stay in business?

Having been a retailer and retail supplier until I retired I find the present attitude of most retailers quite puzzling.

There are good examples eg Harvey Norman, Coles, Woolies Bunnings etc but the majority of shops really can't be bothered to take my money.

Myers is the classic example but even with staff in small shops my wife or I seem to be invisible.

A few years ago now but my local newsagent was hopeless until one day I spoke a bit louder and said " sorry to interrupt your social life but will you take my money please"

The relatively new owner gave me a rather sheepish look and since that day, to his credit, his service (and his business) has improved noticeably.

It also seems to me that there are way too many shops selling women's clothes and far too many coffee franchises ripping off hard working folk trying to get ahead in life.

Some of the lies spun to these poor folk are disgraceful and the people taking their money should be charged with fraud.

It could also be said that the classic situation of parents buying a franchise so the kids have a job (even if adult kids) is often a disaster as well.

In our local shopping centre a family set up a new Cold Rock Ice Creamery, they are not even taking enough to pay the rent let alone get wages.

If his DD had been thorough, he would have been told that Wendies closed down and the juice bar even gave up selling ice cream as a side line as it all went stale.

I do not know how much they paid but $250k is mentioned in online searches, those same searches would have shown quite a few disgruntled CR owners out there.

I agree that online purchases do make it harder but if your website is any good then it can save you quite a lot of time in the store. We quite often do our research looking for stock and info then simply walk in and buy it.

If you wish to stay in business then you must try harder, when people walk into a shop and look around for staff the staff should have been watching for that moment and zoom in for the sale.

Product knowledge and enthusiasm can increase turnover by 20 or 30% IMO and that will take a dying business and turn it around very quickly.

Nothing is foolproof but busy, happy staff make a hell of a difference

greggles said:

The latest company to fall victim to the dismal retail operating conditions is Harris Scarfe

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I was going to buy some pillows from them tomorrow, they have/had a really comprehensive bedding range, was very quiet when i was there buying a doona a couple of months ago.

Country Lad said:

We have been into the local Harris Scarfe often and it never gave me the impression of a business going wrong.

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I had the same experience when I went to buy some Denim jeans a few days ago. There were Christmas shoppers throughout the store and a small queue at the checkout in the middle of the store.

So_Cynical said:

I was going to buy some pillows from them tomorrow, they have/had a really comprehensive bedding range, was very quiet when i was there buying a doona a couple of months ago.

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I think the shops are still open while they’re under administration.

Such a pity Labor didn’t get in.....at least we would have someone to blame.

Humid said:

Such a pity Labor didn’t get in.....at least we would have someone to blame.

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No reason why we can't
Damn Rudd and Turnbull was basically labor.

moXJO said:

No reason why we can't
Damn Rudd and Turnbull was basically labor.

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Trickle down blame

Another problem retail is having, is the banks tightening lending criteria, especially the car sector.
https://www.drive.com.au/news/holde...s5/#utm_source=SMH-Plista&utm_medium=Referral
From the article:
Last month, the chief executive of the Federal Chamber of Automotive Industries, Tony Weber, said while the drought and other domestic conditions are impacting new-car sales “our key concern is the effect over-regulation of the financial sector is having”.

“(We) have been concerned about the risk-averse approach to lending in Australia for some time and see improved access to finance as a key to driving economic growth in 2020,” Mr Weber said in November.

Car is a bit special, you have the EV effect...wait for an ev, aging of population with new migrants flocking to cities and not buying cars initially, most of them coming with no money, and aging curve of the baby boomers keeping their cars while tradies stop buying hilux as job becoming scarce...
I would not like owning a car dealership next year

qldfrog said:

Car is a bit special, you have the EV effect...wait for an ev, aging of population with new migrants flocking to cities and not buying cars initially, most of them coming with no money, and aging curve of the baby boomers keeping their cars while tradies stop buying hilux as job becoming scarce...
I would not like owning a car dealership next year

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I also notice that car ownership is not the "must" it once was with younger city dwellers either. TCO is pretty high now, especially with city parking costs and tolls, even though purchase prices don't seem to have inflated very much at all. The EV effect is certainly strong with me.

Humid said:

Trickle down blame

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Truth is we haven't had decent governing for 2 decades. I wouldn't pee on the current bunch of libs if they were on fire.

moXJO said:

Truth is we haven't had decent governing for 2 decades. I wouldn't pee on the current bunch of libs if they were on fire.

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They ARE on fire

But the key to successful retailing is adaptation - not reliance on Govt. The writing has been on the wall ever since the last recession - shops have been burning down ever since.

PZ99 said:

They ARE on fire

But the key to successful retailing is adaptation - not reliance on Govt. The writing has been on the wall ever since the last recession - shops have been burning down ever since.

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Generation change as well. The population is agoraphobic and social retarded in the tech age.