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Retail Backlash Calls for Watchdog Intervention

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The ACCC has been called on to intervene on behalf of consumers, after Fairfax publicised the fact that Australian fashion importers and wholesalers had brokered price protection deals with suppliers.

Last week, The Age revealed the growing number of Australian fashion importers and wholesalers that have made deals with suppliers in a bid to stop the sale of cheap branded items to our shores via international online retailers.

The story was widely read and was met with varying degrees of consternation from consumers and other retailers alike. Now, the ACCC may be about to become involved after it has begun receiving an increased number of calls to intervene.

Choice spokeswoman Ingrid just yesterday urged the ACCC to “have a closer look” at the practice.

“With the growth in online shopping and these emerging uncompetitive practices, I think it’s important that the ACCC remains vigilant in addressing these activities,” said Just.

Former ACCC Commissioner Stephen King, who is now a Professor of Economics at Monash University, said the that the actions taken by these fashion retailers would appear to contravene competition laws by way of price fixing or resale price maintenance, if these activities were accurately described by The Age. He said he would be surprised if the ACCC did not investigate.

Regardless of the legality of the scenario, the issue has highlighted just how little there is that retailers can do to maintain their margins in the face of cheap international online sales. As discussed last week by Power Retail’s guest contributor Chris Morley, freight-forwarding companies continue to offer consumers the ability to have items forwarded from US or European addresses, side-stepping any delivery moratorium to our shores and these services will only increase in popularity if these practices continue.

In the meantime, Australian consumer confidence is low and continues to remain low regardless of what happens with the ebb and flow of our post-GFC economy. Unfortunately, that seems to be the status quo for now. Yet how are these retailers responding? Every week there is a new call to lower the threshold on GST, thereby forcing the consumer to spend more. Every other week it’s a lobby movement towards reducing Awards and cutting penalty rates, thereby threatening some consumers’ livelihoods.

The public outcry that occurs every time retailers make these kinds of moves gets louder, with more individuals pointing out that the best way to protest is with their feet. Why wouldn’t they turn to online retailers who offer great products, prices and services and don’t paint themselves as greedy bullies in the media?

What do you think is directly hurting retailers more: international online competition, or the public damage they are inflicting on their own brands?

5 Comments

    • Paul
    • 17th May

    When bricks and mortar retail is dead in this country it will be a desolate place in which to live. Pretty hard to shop online with no job because bricks and mortar went the way of the dodo. And that’s not just jobs of the retailers and their staff. It’s the myriad associated suppliers and trades. Oh, and in retirement it will be no better with most of Australian’s superannuation sunk in wasteland shopping centres funded by super funds.

    Reply
    • MarkF
    • 18th May

    I buy online from both Australian and overseas retailers. Online I can actually find what I want instead of going to multiple stores in Australia just to find one item because they have minimal choice available. Even with shipping charges you add fuel, parking and my time to the equation and it balances out, not to mention the massive savings to be made online.

    Now we have the Australian retailers and wholesalers actively becoming my enemy trying to take away my choice of product and where I want to shop. I’ve heard all the excuses dribbled out about how we earn more so we should be charged more. What a load of you know what I mean.

    So lets see. Savings of 50 to 200% or more. Australian retailers and wholesalers trying to make me into nothing more than their piggy bank. Limited choice. Limited online presence of Australian retailers. Lack of choice lack of choice lack of choice.

    All this does is make me more determined to buy from overseas first and Australian retailers last.

    Reply
      • peter
      • 21st May

      Markf, please send me the e-tailer’s details of where I can save 200%. This would mean that the overseas retailer would be paying me twice the advertised price. I like that idea.

      Reply
      • dene
      • 23rd May

      Mark, as a wholesaler I have no problem with you buying from online. I do have a problem if someone does their research in local shops but has no intention of buying as this is just freeloading on the retailers goodwill.

      Aside from the obvious problem you have with maths (very difficult to save 200%), the fact that we earn more means costs are higher. eg the cost of renting a shop is by far the highest in the world compared to the number of shoppers that shop will attract. Melbourne and Sydney are I think 2 and 3 in the world behind Tokyo per square metre, but there are many cities with larger population per retail shop campared to Melbourne and Sydney.

      The fact that we have a very small population means many items are not available for Australians, eg a manufacturer usually wants minimum quantities of about 20,000 items, usually more than a years Australian requirements, so I can’t buy these items for the Australian market. In America or a European country this represents only a few weeks requirements, so the item is more easily available.

      Small businesses, such as local retailers, make up approx 60% of all private sector jobs in Australia. Include the support industries, such as wholesale, couriers, banks, logistics, and others and it’s a sizeable chunk of the Australian economy. Every time you say “stuff you I can buy cheaper from Hong Kong” supports a business in Hong Kong but not here. where do you think your wages are coming from?

      On average a small business earns about 8% net profit, ie if you buy a $100 pair of jeans, the retailer gets $8. A Australian Retailers Association finding last year was that most small retailers are on less than $40,000 a year. This is for a seven day week, working all public holidays except Christmas eve and New Years day.

      Please go ahead and support your Chinese friends. Just don’t complain when you end up without a job as a result.

      Reply
    • Paul
    • 19th May

    Enjoy your job while you have it then MarkF :) You’re all buying yourselves into a very poor future for your children. Oh, but the 1.5% of manmade wordlwide CO2 we submit will be lower, joy

    Reply

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