RetailBiz Round Up for Monday 20 January 2014 – with Patrick Avenell
Today's ASX results are here

Considering how tough many retailers found 2013, reporting sluggish sales, reduced foot traffic and tighter margins, it is particularly important to plan out and strategise for the 2014.

What the year ahead brings is hard to predict. Russell Zimmerman for the Australian Retailers Association says it will start slowly and then pick-up towards the end, while Kim Hutchinson from RSM Bird Cameron says it will be “an interesting yet challenging year” for local businesses.

Some influencing factors are largely out of retailers’ hands, like exchange rate fluctuations, the housing market, employment and government regulation, but plenty of things are in the control of owners and management.

Hutchinson says astute businesses that target growth areas with judicious investment can prosper during 2014.

“In the current economic environment, many businesses are confronted with the dilemma of whether to invest for growth or cut costs to maintain profits,” he said. “Businesses need to have a balanced approach.

“The most successful businesses in 2014 will be those that recognise growth opportunities in a tighter market, ensure due diligence and financing is appropriate and engage their workforce to drive productivity. This will help ensure improved profits that flow through to all stakeholders.”

Hutchinson has four major tips for businesses looking to get ahead in the year ahead:

1. Optimise the business for success Research evolving customer behaviour and make sure the business is in front of the consumer when they are ready to purchase, be that in store, on a smartphone or tablet or on the internet.

2. Be prepared for upcoming legislative changes that can impact the business Changes to Australian Consumer Law have already caught out Harvey Norman franchisees to the tune of over $100,000. Make sure your business knows when laws and changed. The Abbott Government has promised small business reforms so make sure you know what is happening.

3. Keep corporate governance, due diligence and probity high on the corporate agenda “It is essential to a company’s reputation and credibility that effective corporate governance practices are in place at all levels, are working effectively and that there is a process of continual improvement,” said Hutchinson.

4. Ask for help before it’s too late Make sure you seek out professional help as soon as you realise that things are going south.

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Australian retailers and wholesalers are absorbing the hit being caused by the weakening Australia dollar, which has declined from US 95 cents 12 month ago to 88 cents today — a dip of just over 7 per cent, according to analysis by the National Australia Bank.

“Wholesalers and retailers have limited scope at present to pass on higher costs of imported merchandise in the current environment of weak domestic demand and are likely to absorb much of the increased cost in reduced margins,” a report released today said.

IGA has unveiled its Australia Day promotionand there are no dubious T-shirt designs to be seen — focusing on the classic Australian greeting, ‘G’day’.

The campaign, which runs until 19 April 2014, is called ‘Say G’day Day’ and involves outdoor advertising, social media and a new song that will be hosted on IGA’s website.

 “As the Independent Grocers of Australia, IGA retailers want to give back to our customers this Australia Day,” said Michele Teague, general manager, marketing, at IGA’s owner Metcash.

“By resurrecting the household classic, ‘G’day G’day’ we want to celebrate everything that is great about being Australian, encouraging the whole country to sing along and say G’day to each other.

“With over 1,400 stores across the country, no matter where our customers celebrate this Australia Day, there will be an IGA or SUPA IGA just around the corner where locals can pop in and say G’day.”

And you can singalong to the new song right here.  

In the US, Target — which is struggling to adapt to a changing marketplace, similar to the Australian chain owned by Wesfarmers — is experimenting with small-format stores called TargetExpress. This move is a response to greater urbanisation and lack of brand relevance for the famous retailer. 

Quote of the Day

“We have been looking for some time for the right partner who shares our guiding values, our dedication to excellence and our vision for the future. As a result of months of discovery and on-going consultation, we are confident that in Global Yellow Pages we have found the right partner to take the business to the next level.”

Nabi Saleh, executive chairman, announces that Singapore company Global Yellow Pages has purchased the Gloria Jeans brand and franchisor business. There are currently over 800 Gloria Jeans coffee houses in 39 countries around the world.

Image of the Day

Nothing like a $1 discount! (Hat tip to Schmickers)