In our Influencers series run in conjunction with Appliance Retailer magazine, Current.com.au speaks to the industry leaders, big brands and well-known identities that have helped shape the electrical retail industry in 2013.

Today, the CEO of the National Retail Association, Trevor Evans, talks about the change and growth in the electrical retailing industry since 2012 and the pressures and opportunities that exist for Australian retailers.  

What opportunities do you see for the electrical retailing industry?

The outlook for the electrical retailing industry is already better than it was one year ago. The table below shows the retail trade statistics (MAT) for the electrical retail industry. One year ago, four of the six states were recording negative growth in electronics turnover, now only the two smallest states are recording negative growth.

When Australian consumers see more certainty from government, and if the property market stabilises, consumers will gradually shift back to spending rather than savings mode. This shift will be most pronounced in areas of discretionary spending such as electronics, so those retailers should be well-placed to take advantage of the opportunities when consumers start to feel more confident about opening their wallet or purse strings, or taking on additional credit and loans.

Finally, current market conditions provide some good opportunities for retailers to secure leases with more competitive rents and conditions than has typically been the case for many years. It is clear that many tenants are not renewing their leases and commercial landlords are sometimes struggling to find replacement tenants.

Retailers who feel secure about their future prospects should consider whether to lock in good deals for longer periods, rather than accepting short term extensions.

Retail trade statistics (Electrical & Electronics category) – Moving Annual Total

 

  NSW VIC QLD SA WA TAS Total
Apr '12 -7.8 2.2 -1.0 -10.6

6.8

-13.5 -2.5
May '12 -7.7 3.4 0.1 -11.5 9.4 -14.8 -1.7
Jun '12 -7.3 5.4 1.4 -12.3 11.7 -15.6 -0.6
Jul '12 -6.4 7.0 2.2 -12.9 14.4 -17.2 0.5
Aug '12 -5.6 8.8 2.5 -13.8 16.1 -18.1 1.4
Sep '12 -5.5 10.3 2.7 -15.3 16.9 -18.7 1.8
Oct '12 -4.8 9.8 2.4 -15.9 16.4 -19.2 1.7
Nov '12 -4.2 10.2 2.7 -15.8 15.1 -19.3 2.0
Dec '12 -3.4 10.9 2.6 -15.8 14.6 -18.2 2.5
Jan '13 -2.2 9.8 3.0 -15.1 14.1 -17.1 2.7
Feb '13 -0.5 8.4 2.5 -15.8 13.1 -16.9 2.7
Mar '13 0.3 7.2 0.8 -15.7 12.0 -17.0 2.1
Apr '13 1.3 6.8 0.5 -14.3 11.8 -13.7 2.4

 

[ABS data release 3 June 2013, original data]

What threats are currently present in the industry?

Challenges still certainly remain for electrical retailers, particularly in relation to the structural change currently taking place in the retail sector due to the effects of globalisation, digitalisation and the rapid growth of online shopping.

Australian retailers, who typically face higher wage and property costs than their overseas competitors, are being forced to choose between competing on price or competing on service, advice and customer care.

Those hoping to compete on price must increasingly adopt digital and online solutions, whereas bricks and mortar stores are necessarily becoming more focused around well-trained, passionate staff that know their products and their customers’ needs.

There also remains the inequity imposed by our local tax structure, which forces local retailers to collect GST and customs and tariffs while foreign competitors can avoid passing these charges on to exactly the same Aussie consumers.