Myer CEO outlines the retail industry’s biggest challenges

By Matthew Henry

SYDNEY: Sustaining the growth experienced in the past two years is the single biggest challenge facing the retail industry in the future, according to Myer CEO Bernie Brooks, followed by differentiation in a crowded retail environment.

Brooks recently addressed retail leaders including Woolworths SA managing director – retail,  Andrew Jennings and B&Q CEO, Ian Cheshire, who met with the World Retail Congress programme director to establish the key issues to be discussed when the congress convenes at the CCIB in Barcelona next April.

“Retail over the last couple of years has seen fantastic growth in Ebit margins but the ability to sustain that is going to be an incredible challenge,” Brooks told the Board.

“We’ve seen market expectations of department stores of 10 to 13 per cent Ebit margins and supermarkets at three to six per cent Ebit margins.”

Brooks also posed the question, how do you innovate in the market with so many retailers now being the same?

“It’s very hard to establish a point of differentiation, whether that be in the offer you have, the people you have, the technology you use as supply chain, the infrastructure or the customer offer. It’s a challenge,” he said.

“The other challenge is to be relevant to the consumer that is multi-faceted and changing so much by the day in what they buy, how they purchase and how they use the item that it becomes a challenge to be consumer led in your thought process.”

Other speakers addressing the board suggested that gathering quality information about customers was one of the big challenges facing retailers in an increasingly global market.

Brooks also shared this view, linking it to sustainable growth.

“The ability to approach the all encompassing area of sustainability of the triple bottom line is going to be an ever increasing challenge, as is to make your people better and more consumer led than other people. So again it’s the consumer led aspect and the ability to cater for an associated demographic that’s quite different than what it was over the last few years,” he said.