By Craig Zammit
SYDNEY: Clive Peeters has opend its thirtennth store in Australia, in Moonah Tasmania, to a mixed reaction, with retailers hoping for a boost in sales while still fearing a price war.
According to electrical retailers in the area, the arrival of Clive Peeters will stimulate greater competition in the region.
“I think it will be good for the industry,” Electric World Retravision proprietor, Jake Shivas told current.com.au.
“It will motivate people to spend money in the industry as opposed to buying a car or spending their money elsewhere.
“We’ve been established for a fair while now and the cost of our business is low, however I think it will create genuine competition in the area and it will help stimulate the overall market.”
The new superstore features a unique design and layout for the region, something which has seen the new store receive much praise from its competitors.
“They have a magnificent showroom; I’ve never seen one of good as it. It’s totally different to anything in Tasmania,” said Shivas.
However many within the industry have been questioning the impact such a store will have on its surrounding businesses.
Tasmanian state treasurer, Michael Aird believes the new store will have a positive effect for the regions consumers, hinting at a potential price war.
“Obviously these developments do create competition and I’m sure those retailers involved are watching prices here, and in other areas of Hobart, and that can only benefit consumers," Aird told The Mercury newspaper.
However, with the same number of consumers buying the same amount of goods from an increased number of stores, some believe pricing may indeed increase and that there will be no such price war.
“Population isn’t increasing in the area so they will certainly take market share away from Harvey Norman, Retravision, Elite Appliances and the like,” said Shivas.
“There won’t be a price war. We had a meeting among the store managers this week, and we decided to increase our prices by two points. We think their pricing formulas are designed to make money.”
The smaller retailers in the region may begin feeling the pinch, with the bigger stores attracting an increased number of customers, leaving an even smaller market share. However, there still may be enough demand to accommodate all retailers in the area.
“It may not impact the small traders that much, but I guess it depends on who you consider to be the small traders. Stores will have competition and promotions and will still be able to differentiate themselves,” Shivas said.
Clive Peeters managing director, Greg Smith, was unavailable for comment.