By all accounts, it’s been a shocking start to the new decade for the retail landscape. A myriad of high-profile bricks and mortar retailer departures have prompted a flurry of questions about the future of this sector in Australia.
Just about every type of operator has pulled out of the Australian retail game over the past six to 12 months – from shoes, food, fashion, sporting, toys, beauty, gaming and discount retailers.
Commentators have been quoted in various parts of the media claiming that the nation is well and truly in the grip of a market correction, with terms like ‘retail apocalypse’ being bandied around by well-respected retail industry experts.
And when looking for economic drivers of this downturn, Deloitte Access latest Economics’ Retail Forecasts (Q4 2019) reveals weak wage growth, high debt levels and increasing price pressures are hurting retail demand.
Retailers are being squeezed on both sides from weak sales volumes and increasing costs and, as a result, margins are coming under pressure, said Deloitte Access Economic’s partner and retail forecasts principal author David Rumbens.
“Unfortunately for retailers, price growth is not reflective of stronger demand, but rather increasing cost pressures from a weaker Australian dollar, the increase to the minimum wage, and supply disruptions from droughts and floods,” said Rumbens.
There’s no doubt that these closures are transforming the country’s retail landscape.
And while there are too many to provide an exhaustive account for, here’s a list of some of the most recent, notable casualties:
The fashion retailer this month confirmed 37 stores were slated to close their doors across the country, with KPMG appointed as administrators, who are seeking urgent expressions of interest from parties interested in acquiring or investing in the business.
KPMG says the business has been challenged by current tough market conditions and pressure from online competition.
Fast fashion national womenswear retail Bardot has also announced that it will shut 58 stores and cull more than 500 jobs following a restructure after its recent collapse.
The company said while the decision was tough, analysis determined closure a necessary step to rebuild the financial performance of the business.
The mid-market retailer placed into receivership in December in a move that reportedly allows it to escape onerous leases and force landlords to cut rents. Then in January, the retailer announced it was set to shut 21 stores across five states in just one month.
This gaming retailer announced it will shut down within weeks after an email confirming the closures was sent to members of the popular videogaming chain. The company blamed ‘the ever-changing retail landscape’ for the closure.
EB Games is owned by videogame retailer GameStop, which has been in the grip of a sharp decline over several years.
The high-profile activewear retailer announced it was on its last legs in October, and was abruptly put into receivership.
The online retailer sold a range of items including sneakers, leggings and supplements. It blamed the country’s dire retail climate for the closure.
This iconic Australian no-frills discount retailer promised bargains for shoppers, but closed its doors after 166 years of trading in November last year. This will result in the closure of more than 30 stores, mostly located in Victoria and regional areas.
The Australian arm of UK fashion retailer Karen Millen entered into administration in September, prompting the closure of seven stores. The high-end retailer has operated in Australia since 2004, blaming a tough retail environment for the closure.
This educational retailer, which previously traded as Australian Geographic, made the tough decision to shut 63 stores after revealing it was unable to find a buyer for the brand.
Just six months after announcing plans to launch into the Australian market, German supermarket chain Kaufland revealed it would pull the pin before it opened a single store on Aussie soil.
The decision to withdraw from the Australian market, where it planned to open several retail locations, left 200 Australian employees in limbo.