Australia's remote location no longer provides protection for retailers

Livewire Exclusive

Livewire Markets

Australia's remote location no longer provides protection for retailers. Discretionary retail has historically been a hard place to consistently make money, with few barriers to entry, lots of customer choice and a large component of fixed costs in the form of staff and leases. Competition has intensified in recent years due to the internet, which has brought brand-owners and shoppers closer together than ever before. Retail brands increasingly have global recognition and appeal due to the effect of the internet and globalisation in general. The range of outcomes for a discretionary retailer that owns their own brand has probably widened. If they do a good job they have an opportunity to make more money than a decade ago due to the global rollout opportunity, but alternatively if they don't provide a strong customer value proposition then they are going to struggle, with Australia's remoteness no longer as big a protection from competition as it once was. The range of outcomes for discretionary retailers that don't own their own brands is probably skewed to the downside.

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