SPENDING at department stores has slumped to its lowest in more than two years, despite recent signs the retail industry is limping towards a recovery.   :-?

Turnover at the nation's stores edged up 0.2 per cent in October, the fourth monthly rise in a row, the Bureau of Statistics said yesterday.

Department stores, however, have missed out entirely on the recent rise, suffering their fourth consecutive slide in spending, which fell to its lowest level since February 2009.


The weaker than expected figures came amid more bad news for the housing industry, with building approvals plunging 10.7 per cent.

Although retail trade has now risen by 3.4 per cent in the past year, the improvement has been dominated by spending on food and cafes, up more than 4 per cent over the year.

Department stores, on the other hand, have suffered a 3.3 per cent yearly drop in sales amid deep discounting and rapid growth in online shopping.   :(

The executive director of the Australian Retailers Association, Russell Zimmerman, said the strength of spending on food and cafes disguised weakness in other parts of the industry.

Echoing calls this week from the retail baron Solomon Lew, Mr Zimmerman said an interest rate cut was needed to restore shoppers' spirits.

''We can say with confidence today's result will lift our Christmas expectations slightly. However, a December interest rate cut is still needed to boost spending confidence in the lead-up to Christmas and ensure some Christmas cheer for retailers,'' he said.

The ongoing weakness in department store spending comes after David Jones last week posted an 11.2 per cent slump in its first-quarter sales, citing lower confidence due to Europe's debt crisis.

In another sign the economy is subdued outside the mining industry, building approvals fell 10.7 per cent in October, after an even sharper fall of 14.2 per cent the previous month.

HSBC's chief economist, Paul Bloxham, said the slump suggested residential building was making way for the mining boom. ''There is a shift taking place from house building to building mines - we can't do both at once.''

The weak trends affecting much of retail and the building industry suggest much of the non-mining economy hit a slow patch in late 2011.

However, economists are divided about whether the Reserve Bank will cut interest rates at its final meeting of 2011 next Tuesday.

A senior economist at Commonwealth Bank, James McIntyre, said he expected the Reserve to keep official interest rates on hold at 4.5 per cent until February unless the situation in Europe took a turn for the worse in coming days.

''Retail sales outcomes like today's figures provide the RBA with the flexibility to cut rates if needed to bolster the domestic economy against potential global shocks emanating from the European sovereign debt crisis,'' Mr McIntyre said.

Despite the slump in department store spending, there have been glimmers of hope in other struggling areas within the retail sector in recent months.

The fashion industry enjoyed a bounce from the spring racing season in October, with spending on shoes and clothes up 1.2 per cent, the second rise in a row. But spending at fashion retailers is still 2.2 per cent lower than a year ago.   :-?

Read more: http://www.theage.com.au/business/tills-quiet-at-department-stores-20111201-1o944.html#ixzz1fJk2rp6j

Did ya cut your prices, or just pretend that you have?.   :(

It's a no-brainer, really.

People can't/won't spend up big in department stores
when they are battling against obscene price rises in
essential services, food, and rent/mortgages.

No matter HOW low the stores' prices are.

People are after a bargain this year. There's few bargains and little service at department stores.

Besides the credit card is maxed out.

Everything is going up, except wages (pollies excluded) so people don't have dollars left over for Chinese merchandise. If they do they'll get it cheaper online.


Hey Kat....you stole my thunder, great minds think alike!

I read yesterday Victorians are bracing for a 10% hike in natural gas and electricity prices.

Little wonder people arent spending.

Verge wrote on Dec 2^nd, 2011 at 7:57am:

I read yesterday Victorians are bracing for a 10% hike in natural gas and electricity prices. Little wonder people arent spending.

we have to pay for all that 'free' renewable energy somehow!

We have a friend who has a general ebay and oztion business selling everything from furniture to kiddies cloths, and its been booming since the beginning of September. She is finding it difficult to keep up with the demand.

High prices in department stores and NO service is driving millions to the positive shopping experience on the internet.

culldav wrote on Dec 2^nd, 2011 at 9:18am:

We have a friend who has a general ebay and oztion business selling everything from furniture to kiddies cloths, and its been booming since the beginning of September. She is finding it difficult to keep up with the demand. High prices in department stores and NO service is driving millions to the positive shopping experience on the internet.

so does your friend pay a rent of any kind or GST.. or does she have to carry insurance like workerscomp?..and what sort of paperwork does she have to provide for the govt?..I am just asking as it seems amazing to me.. that as you say the net is booming therefore so must Aust Post or commercial delivery business'.. .. how we equate lack of service at the shops.. with no service from the net I am not sure...

as it is I read where people are going into shops trying things on then buying them off the net...which to me is a bit rude... but what will happen when these shops are gone..and you cannot try on the shoes before you buy?..

one thing the cleaners wont need to worry about their pay though when the shops are gone.. they too will be gone..

She runs the business from her home/garage/shed. She does incorporate GST, but no insurance because its just her working the business so far, and hubby sometimes with the heavy lifting and so forth.  She just keeps general records for tax purpose.  

She will be introducing ladies shoes into her business in January, which are directly imported from Italy. She is going to start something “very unique” to internet selling that is bound to make her very wealthy - brilliant idea that she came up with when investigating the shoe manufactures in Italy.

She is going to try to advertise it on ‘today tonight’ and ‘a current affair’ and other shows…its that good.

Auspost is definitely benefiting from internet sales, and probably the only thing that’s stopped it from being sold by the Government.

<<one thing the cleaners wont need to worry about their pay though when the shops are gone.. they too will be gone.. >>
...................................................................

They'll have to get other jobs like the dunny man and the horse-shoe-er as we evolved. They used to have two garbo's hanging off the back of the truck, now they have one driver.

One door closes, another opens, hopefully straight away, but that's not always the case.

culldav wrote on Dec 2^nd, 2011 at 11:13am:

She runs the business from her home/garage/shed. She does incorporate GST, but no insurance because its just her working the business so far, and hubby sometimes with the heavy lifting and so forth.  She just keeps general records for tax purpose.   She will be introducing ladies shoes into her business in January, which are directly imported from Italy. She is going to start something “very unique” to internet selling that is bound to make her very wealthy - brilliant idea that she came up with when investigating the shoe manufactures in Italy. She is going to try to advertise it on ‘today tonight’ and ‘a current affair’ and other shows…its that good. Auspost is definitely benefiting from internet sales, and probably the only thing that’s stopped it from being sold by the Government.

I went to Italy many many years ago and bought a pair of shoes they were the best pair I think I had ever had.. Ive always had an akward foot one foot bigger than the other.. but they were so yummy..good luck to her.. but you can see where she saves a lot of money I believe workcover is so blown out now it is crippling.. and every time an employee goes on it then up go the premiums..overhead costs in this country are staggering we had our own business years ago.. I would never dream of doing that today though

Ex Dame Pansi wrote on Dec 2^nd, 2011 at 11:42am:

<<one thing the cleaners wont need to worry about their pay though when the shops are gone.. they too will be gone.. >> ................................................................... They'll have to get other jobs like the dunny man and the horse-shoe-er as we evolved. They used to have two garbo's hanging off the back of the truck, now they have one driver. One door closes, another opens, hopefully straight away, but that's not always the case.

what the hell is supposed to replace the retail and service sector job wise? manufacturing replaced agriculture, service replaced manufacturing. they all existed at each period when each one was dominant so anybody could have guessed where the next jobs were going to go when the proportions between the sectors were changing. so what's next? the post-service sector (as in the disability pension or the dole)? ;D

Ex Dame Pansi wrote on Dec 2^nd, 2011 at 11:42am:

<<one thing the cleaners wont need to worry about their pay though when the shops are gone.. they too will be gone.. >> ................................................................... They'll have to get other jobs like the dunny man and the horse-shoe-er as we evolved. They used to have two garbo's hanging off the back of the truck, now they have one driver. One door closes, another opens, hopefully straight away, but that's not always the case.

I guess thats one way of looking at it..its one of the great unskilled labor forces though...and if you happen to be in the 50s I expect it could be traumatic for some..

culldav wrote on Dec 2^nd, 2011 at 11:13am:

She runs the business from her home/garage/shed. She does incorporate GST, but no insurance because its just her working the business so far, and hubby sometimes with the heavy lifting and so forth.  She just keeps general records for tax purpose.   She will be introducing ladies shoes into her business in January, which are directly imported from Italy. She is going to start something “very unique” to internet selling that is bound to make her very wealthy - brilliant idea that she came up with when investigating the shoe manufactures in Italy. She is going to try to advertise it on ‘today tonight’ and ‘a current affair’ and other shows…its that good. Auspost is definitely benefiting from internet sales, and probably the only thing that’s stopped it from being sold by the Government.

I reccommend your firend, may want to seriously her insurance issues!

If she has Home/Contents insurance that has a "Personal Liability" cover, but it will not cover any event related to her business.

A possible example -
Whilst doing an interview for ‘a current affair’ (?), she offers the reporter a pair of these fine Italian shoes to model for a promo. As the reporter is modelling the shoes, the fine stilletto heel on the left foot snaps, the reporter collapses backwards, hitting her spine on the coffee table on the way down and as a result becomes a paraplegic.

Her house insurer declines the claim, which will most likely be worth millions, because it related to your friends business, which means your friend & her husbands personal assets are exposed to large legal expenses & an eventual settlement, for the reporter & possible claims from ‘a current affair’.

Trust me, the insurance industry is based on two words and for very good reasons and those two words are -
Sh!t Happens.  

If the business isn't solid enough to support the proper insurances, then it just isn't solid enough to be there. Public Liability should be a minmum & your friend really should have a chat to a reliable Insurance broker, for some advice!

longweekend58 wrote on Dec 2^nd, 2011 at 8:39am:

Verge wrote on Dec 2nd, 2011 at 7:57am: I read yesterday Victorians are bracing for a 10% hike in natural gas and electricity prices. Little wonder people arent spending. we have to pay for all that 'free' renewable energy somehow!

rubbish !! It's got nothing to do with renewable energy. !! That's just a scapegoat by the libbo Luddites. The real problem is in privatisation of public assets and saving money by cutting back on the meter readers !!

My electricity company tried to rip me off on a power bill by estimating the wrong amount. Fortunately I had all of the previous bills to prove them wrong otherwise I could have easily paid it and I wouldn't have heard anymore about it. How many people would fall for the BS and pay it ??

cods wrote on Dec 2^nd, 2011 at 9:52am:

culldav wrote on Dec 2nd, 2011 at 9:18am: We have a friend who has a general ebay and oztion business selling everything from furniture to kiddies cloths, and its been booming since the beginning of September. She is finding it difficult to keep up with the demand. High prices in department stores and NO service is driving millions to the positive shopping experience on the internet. so does your friend pay a rent of any kind or GST.. or does she have to carry insurance like workerscomp?..and what sort of paperwork does she have to provide for the govt?..I am just asking as it seems amazing to me.. that as you say the net is booming therefore so must Aust Post or commercial delivery business'.. .. how we equate lack of service at the shops.. with no service from the net I am not sure... as it is I read where people are going into shops trying things on then buying them off the net...which to me is a bit rude... but what will happen when these shops are gone..and you cannot try on the shoes before you buy?.. one thing the cleaners wont need to worry about their pay though when the shops are gone.. they too will be gone..

why would her friend be stupid enough to pay exorbitant rent to a greedy shop landlord when she doesn't have to and why should the consumer pay for this greedy rent in the price of the goods ?

You are an apologist for inefficient and outdated business practices !!

culldav wrote on Dec 2^nd, 2011 at 11:13am:

She runs the business from her home/garage/shed. She does incorporate GST, but no insurance because its just her working the business so far, and hubby sometimes with the heavy lifting and so forth.  She just keeps general records for tax purpose.   She will be introducing ladies shoes into her business in January, which are directly imported from Italy. She is going to start something “very unique” to internet selling that is bound to make her very wealthy - brilliant idea that she came up with when investigating the shoe manufactures in Italy. She is going to try to advertise it on ‘today tonight’ and ‘a current affair’ and other shows…its that good. Auspost is definitely benefiting from internet sales, and probably the only thing that’s stopped it from being sold by the Government.

Well done. It's good to see an aussie battler take on greed incorporated and pass on the goods at much more realistic prices ;)

And a side benefit is the extra business for Aussie Post as opposed to ripoff prices feeding greedy shop landlords which is what cods endorses !!

perceptions_now wrote on Dec 2^nd, 2011 at 3:06pm:

culldav wrote on Dec 2nd, 2011 at 11:13am: She runs the business from her home/garage/shed. She does incorporate GST, but no insurance because its just her working the business so far, and hubby sometimes with the heavy lifting and so forth.  She just keeps general records for tax purpose.   She will be introducing ladies shoes into her business in January, which are directly imported from Italy. She is going to start something “very unique” to internet selling that is bound to make her very wealthy - brilliant idea that she came up with when investigating the shoe manufactures in Italy. She is going to try to advertise it on ‘today tonight’ and ‘a current affair’ and other shows…its that good. Auspost is definitely benefiting from internet sales, and probably the only thing that’s stopped it from being sold by the Government. I reccommend your firend, may want to seriously her insurance issues! If she has Home/Contents insurance that has a "Personal Liability" cover, but it will not cover any event related to her business. A possible example - Whilst doing an interview for ‘a current affair’ (?), she offers the reporter a pair of these fine Italian shoes to model for a promo. As the reporter is modelling the shoes, the fine stilletto heel on the left foot snaps, the reporter collapses backwards, hitting her spine on the coffee table on the way down and as a result becomes a paraplegic. Her house insurer declines the claim, which will most likely be worth millions, because it related to your friends business, which means your friend & her husbands personal assets are exposed to large legal expenses & an eventual settlement, for the reporter & possible claims from ‘a current affair’. Trust me, the insurance industry is based on two words and for very good reasons and those two words are - Sh!t Happens.   If the business isn't solid enough to support the proper insurances, then it just isn't solid enough to be there. Public Liability should be a minmum & your friend really should have a chat to a reliable Insurance broker, for some advice!

Very good point !!

The irony is if  someone buys the same pair of shoes directly from an overseas online seller they have no come back whatsoever. It seems the online revolution favours overseas sellers but that also applies to aussies selling to overseas buyers ;)

Kat wrote on Dec 2^nd, 2011 at 6:52am:

It's a no-brainer, really. People can't/won't spend up big in department stores when they are battling against obscene price rises in essential services, food, and rent/mortgages. No matter HOW low the stores' prices are.

Are you serious, house prices are falling, interest rates are on the way down from the low they have been running. Food has risen yes as it always does and we are now paying the price for the lack of investment in power and water for the last decade+ so we could have it all with no inflation. Amazing just how those with the good life can manage to whinge like stuffed pigs while so many don't even enjoy the luxury of potable water, safe electricity and reliable work.

AND Department stores wonder why.



Myer store manager refuses to blame
Carbon Tax, rising interest rates for price gouge

A BOTTLE of Chanel No5 is reportedly sold every 55 seconds around the world. But Myer shoppers pay an extra 40 per cent for the privilege. "I can't categorically say why there's such a significant price difference," the Myer group general manager, Judy Coomber, says. She denies the department store is profiteering but won't reveal its margins. Myer is charged more for cosmetics than department stores in the US and Europe because of the size and remoteness of the Australian market, Coomber says. Such price discrimination is common, according to the Productivity Commission. Retail analyst Russell Wright, from Patersons Securities, agrees: "Australian consumers are being exploited by global suppliers who charge well in excess of what is an appropriate cost for distribution." Higher wages, GST and freight costs to Australia can add 10 per cent to 15 per cent to retail prices, he says. Overseas suppliers typically add a further impost of 20 per cent to 30 per cent on average, he adds. "This surcharge in some cases is so excessive that even though Myer is the largest importer of cosmetics in Australia it can't source products cheaper than what's available online.'' Separately, Coomber questions the quality of cheaper goods through online retailers. StrawberryNET in Hong Kong rejects this charge, saying its products are genuine.


http://www.smh.com.au/lifestyle/shopping/why-the-high-price-tag-20111203-1och9.html#ixzz1fVkMZvV7

wrote on Dec 4^th, 2011 at 9:04am:

AND Department stores wonder why. Myer store manager refuses to blame Carbon Tax, rising interest rates for price gouge A BOTTLE of Chanel No5 is reportedly sold every 55 seconds around the world. But Myer shoppers pay an extra 40 per cent for the privilege. "I can't categorically say why there's such a significant price difference," the Myer group general manager, Judy Coomber, says. She denies the department store is profiteering but won't reveal its margins. Myer is charged more for cosmetics than department stores in the US and Europe because of the size and remoteness of the Australian market, Coomber says. Such price discrimination is common, according to the Productivity Commission. Retail analyst Russell Wright, from Patersons Securities, agrees: "Australian consumers are being exploited by global suppliers who charge well in excess of what is an appropriate cost for distribution." Higher wages, GST and freight costs to Australia can add 10 per cent to 15 per cent to retail prices, he says. Overseas suppliers typically add a further impost of 20 per cent to 30 per cent on average, he adds. "This surcharge in some cases is so excessive that even though Myer is the largest importer of cosmetics in Australia it can't source products cheaper than what's available online.'' Separately, Coomber questions the quality of cheaper goods through online retailers. StrawberryNET in Hong Kong rejects this charge, saying its products are genuine. http://www.smh.com.au/lifestyle/shopping/why-the-high-price-tag-20111203-1och9.html#ixzz1fVkMZvV7

they forgot to mention the landlord and share holder greed factor ;)