How our retail industry can continue to thrive

Opinion piece by SDA Secretary Josh Peak featured in the Advertiser
It’s hard to imagine what our life would be like without our retail industry.

Day in and day out – retail workers help us feed our families, put clothes on our backs and furniture in our homes. There’s no doubt that the work retail workers do is essential to our daily lives.

However, as we enter a new decade, our national retail industry is facing new tests and challenges, and these must be tackled head on.

Since December, we have seen a concerning number of stores close their doors including Bardot, EB Games and the iconic Harris Scarfe Rundle Mall store. These have come on top of closures at Big W, Target, Radio Rentals, Le Cornu and Dick Smith in recent years.

Despite this, retail continues to be one of our biggest sectors, providing work for approximately 80,000 South Australians.

So what does this trend of closures boil down to?

While some may believe it is a result of customers going click-crazy, this is not quite true.

In 2018, online shopping accounted for just 10% of retail sales in Australia and cannot be solely blamed for the problems facing some brands.

For many decades, our retail industry has thrived and evolved to withstand changes.

From the introduction of the barcode to the creation of supermarkets and self-serve checkouts, retail stores – both big and small – have proved resilient and become a critical source of jobs and economic growth.

Online shopping and automation are no different to these past disruptions we once feared.

However, there are two major challenges which do pose a threat to our retail industry at this time of rapid change.

Firstly, our country continues to be crippled by low wage growth – an issue we’ve called on the Government to act on countless times. This has led to low consumer confidence and in turn, resulted in some of the worst retail figures since 1990.

Unless this retail recession is restrained, money will continue to be sucked out of this sector and there will be less capital to invest in changes to the retail industry and prepare for these disruptions.

Secondly, private equity firms – who often pursue short terms profits over long term sustainability – have stripped and flipped locally grown brands like Dick Smith and Harris Scarfe and rendered them unable to adapt to the challenges of the 2020s.

Unfortunately, the people who have suffered most at the hands of private equity firms are retail workers – mums and dads, sons and daughters – who work hard every day to make sure we can get food onto the table or into our kids’ lunchboxes.

Thanks to private equity firms, in the United States, over 600,000 retail workers – working in household names like Kmart and Toys R Us – have been left without a secure income and a job they can rely on.

To ensure our retail sector does not go down a similar road and that retail workers do not become a casualty of these changes – we must take action.

With consumer confidence at rock-bottom and retail sales figures the worst they have been in 30 years; the time has come for the Federal Government to seriously consider stimulus measures to save jobs and the sector.

The Federal Government must recognise the indispensable role that the retail industry and retail workers play in our daily lives.

The Government must make wage growth and secure jobs a matter of priority and crack down on the self-interested private equity firms who are reaping the benefits but not sowing any seeds for the future.

Australia’s retail industry has proven time and time again that it can survive but if we want to avoid US-style retail Armageddon, the Government must act now.