Bernie Brookes got a tiny little reward for his patience in the face of an ugly retail slump yesterday when Myer reported some positive comparable store sales growth for the first time in eight quarters.
Sales grew 0.3% in the three months to July and were also up in the first six weeks of the new financial year. While Brookes ran a million miles from calling it a trend, when you’ve had the past few years that Myer has had you take what you can get.
Myer is a really interesting study of how retail is trying to transform itself in the face of structural change and more particularly the online threat. At the same time as Myer is desperately rushing to increase its online presence, it is increasing its investment in customer-facing staff in a bid to improve its in-store customer service.
Of course, running in two directions at once isn’t cheap, and doing it in an environment where sales growth is tepid or non-existent means Myer investors should brace for further hits to earnings. Net profit for 2012-13 fell 14.3% to $139.3 million.
But let’s put all that aside for a second and focus another issue raised during Brookes’ press conference yesterday: his reaction to this week’s report from a federal government taskforce that recommended the lowering of the GST import threshold. While the report made it clear the expense of collecting GST on imported goods below the current $1000 threshold would likely be higher than the revenue earned, Brookes believes the government needs to act.
“My encouragement would be to take the finding, adopt it very quickly, there are no barriers in the way,” Brookes said. “Myer and other retailers are not looking for a free kick in this area; we just want to have a level playing field.”
I have sympathy with the argument from Brookes and the rest of the retail lobby that the playing field should be levelled. But from a practical point of view, I don’t think there is any remote chance of this happening. The reason is simple: what politician is going to make a legislative change that will effectively increase the prices millions of Australians pay for stuff online?
Remember the backlash that Gerry Harvey faced from consumers when he first suggested the GST import threshold should be scrapped?
I can guarantee that politicians from Labor and the Coalition haven’t and with an election about 12 months away, there is no way either side would risk raising the ire of voting consumers by supporting any threshold cut.
Brookes made a really interesting point yesterday about how retail rents are falling as power shifts from the landlords to the retailers, just as the internet has seen power shift from retailers to consumers. It’s a bit different in politics, of course. The power of the household has always been far stronger than that of any business lobby group.
And no politician is going to back a GST change that would directly hit the household.
*This article was originally published at SmartCompany
And just what does the Trans Pacific Partnership mean to Oz Retailers when according to this wikipedia :- ‘Of the 26 chapters under negotiation, only a few have to do directly with trade. The other chapters enshrine new rights and privileges for major corporations while weakening the power of nation states to oppose them.’ Soon to be signed WTF
A $6 Flat tax on all parcel imports and GST only applying to high value items is the solution.
Make the courier/postal companies pay the fee at their end so there is no extra work for customs and people know the total before purchasing.
Well spotted, Izatso. The TPP is a nightmare, coming straight at us like a runaway train:
http://rwer.wordpress.com/2012/09/04/trans-pacific-partnership-is-washington-speak-for-corruption-and-theft/
{“The power of the household has always been far stronger than that of any business lobby group.
And no politician is going to back a GST change that would directly hit the household.”}
What on earth do these two sentences pretend to say?
The first is obvious bullsalt, business lobby group power outweighs consumer and public interest on a variety of issues and overarches public concerns on a daily basis eg carbon pice propaganda from the media mates of big business, workNOchoices as a second example [does anyone really believe that if the COALition wins the next election we are not going to see a new brighter polished up version of workNOchoices??]
The GST itself was directly sponsored by business lobbies, and its enactment was a direct blow at households and pushed on households by complicit politicians.
Its hard to tell if presently such dubious ideas so baldly is due to extreme naivete on the part of the writer or just another expresssion of ideological blindness.
That TTP is scary stuff.