Challenges confront Australian retail industry
Workplace flexibility, trading hours, enterprise bargaining, productivity measures, regulatory restrictions, online retailing and exemptions from GST are all included in the Australian Government Productivity Commission draft report on the Economic Structure and Performance of the Australian Retail Industry.
Australia’s 140,000 retail businesses employ around 10.7 per cent of our workforce and accounts for 4.2 per cent of our GDP.
Trading conditions are challenging and over the last three decades retail sales growth has trended down. Consumers are spending more of their rising incomes on a range of non-retail services including financial, property, travel and entertainment.
The industry is confronted by many challenges with online retailing and the entry of new innovative global retailers being the latest. While this intensified competition is good for consumers it is challenging for the industry which does not compare favourably in terms of productivity with many overseas countries.
Australia also appears to lag a number of comparable countries in its development of online retailing. The Productivity Commission’s estimate is that online retailing represents 6 per cent of total Australian retail sales – made up of 4 per cent domestic online ($8.4 billion) and 2 per cent from overseas ($4.2 billion). In some other countries online sales figures are higher and seem set to grow further. This is predicted to happen in Australia.
Retailers operate under several regulatory regimes that reduce their competitiveness. The draft report identifies major restrictions which require improvement:
- planning and zoning regulations which are complex, excessively prescriptive and often exclusionary
- trading hours regulations which interfere with the industry’s ability to adapt and compete in a more globalised market
- constraints on workplace flexibility such as obstacles to the greater use of enterprise bargaining and the adoption of best practice productivity measures.
Regulatory reforms are needed for the Australian retail industry to adapt successfully to the more globally competitive market in which it now operates according to the Productivity Commission.
The draft report titled Economic Structure and Performance of the Australian Retail Industry was released on 4 August 2011 and you are invited to examine the report and make written submissions by Friday 2 September 2011.
Les Pickett is Chief Executive Pacific Rim Consulting Group and Partner for Australasia and South East Asia for international human capital management organisation McBassi & Company. His professional career has taken him to over twenty countries. Former roles include General Manager Management Services Coles Myer and Deputy Director United Nations System Staff College. He is an Ambassador to Tomorrow’s Global Company, a UK based business led think tank, member of the International Board of Advisors International Public Management Association for Human Resources and past international president of the Institute of Business Administration.
Les Pickett is an adjunct of Victoria University, member of the Australian Government Consultative Committee on Knowledge Capital, member of the International Board of Advisors International Public Management Association for Human Resources, former Deputy Director United Nations System Staff College, Past National President Australian Institute of Training and Development, Past Chairman Executive Board International Federation of Training and Development Organisations and International President Institute of Business Administration.
