By James Wells
SORRENTO, ITALY: Narta chairman John Wipfli has opened the buying group’s 2010 conference by revealing a record year of purchases and sales and performance ahead of the market, but with substantial challenges ahead.
“Despite the turbulence surrounding us both globally, and domestically, our industry managed to grow in the fiscal year just ended. I am happy to be able to report that Narta has enjoyed strong growth, in excess of the industry average, and has increased its Trans-Tasman market share, significantly,” said Wipfli.
However, without specifically referring to the demise of group members including Clive Peeters, Wipfli outlined the current and future challenges facing its retailers following the injection of consumer confidence from the stimulus spending.
“I believe we are now trading in an even more difficult retail environment, than the one we faced at the beginning of 2009. And this time, we don’t have the safety net of fiscal stimuli to help us. We operate in an industry, which to a large extent has been built on volume.”
“A few worrying signs are emerging. Global and national, non-traditional mass marketers, are taking share. While the initial gains are largely at the commodity end of our market, the trend is clearly emerging, and probably unstoppable.”
“However this year has painted a different picture, with significant volatility in both volumes and profitability. As a generalisation, all of us have read the reports of major organisations in the retail industry at large, downgrading profit forecasts, and some even predicting losses, while across all sectors of retailing, there were casualties. “
“As an industry we have seen deteriorating consumer confidence, and this has been compounded in many instances, by stock shortages, or late arrivals of product, further impacting on our businesses.”
Wipfli warned that significant erosion in pricing represents a substantial challenge for the group.
“In the AV sector, we have the constant scourge of ever decreasing price points, which require us, as we all know, to constantly move more boxes, to bank the same dollars. Fortunately, sitting above the entry point products, new technologies and features are attracting consumers to move up from those basic products and to enhance their in home entertainment experience. Nevertheless, the quest for constant volume growth is ever present.”
“In the AV sector, it will be particularly challenging to maintain dollar volumes, for our members and supplier partners. If what I have been told is correct, that there will be an anticipated further 30 per cent drop in panel pricing, over the next 12 months. We ask that the whitegoods suppliers not go down the same path.”
Wipfli reinforced the need for ‘leadership’ in the face of economic difficulty – the key theme established at the group’s last conference in Whistler at the beginning of last year.
“The tougher and more unpredictable the times, the more leadership comes under fire. We become increasingly sensitive to the difference between leadership of hope, versus leadership of pragmatism. Fortunately our industry has been largely well led. We have managed to navigate through the most turbulent period that our industry has so far encountered globally.”
Wipfli called on the group’s valued suppliers during this difficult economic climate to be flexible when solving problems together.
“I am confident, that if we continue to collaboratively embrace these principals, we will navigate our way successfully through what I believe to be one of the most difficult trading periods, in the industry’s history.”
During his speech, Wipfli welcomed back Rick Hart to the Narta group with his new business Kitchen HQ in Perth as well as the new members to the group – Nick Diamantis from Diamonds Camera Video and Digital and Con Nicholas from Wow Sight & Sound who was unable to attend the conference.