RetailBiz Round Up for Wednesday 8 January 2014 – today's ASX price results are here.

Although retail sales in the lead-up to Christmas were a little sluggish, a late surge in the final days before Santa’s arrival helped push the total figure to around $42.1 billion, according to ARA executive director Russell Zimmerman.

“The first couple of weeks of December in the lead-up to Christmas, are traditionally very good trading periods, but were not as good as retailers were hoping for,” Zimmerman said. “But the last Saturday, Sunday, Monday and Tuesday before Christmas were absolutely brilliant — and that made a lot of sense to me because most offices didn’t close until the Friday — there were lots of people around and a good Christmas feeling by then.

“So although Christmas started off a lot slower than retailers would have liked, it came home very strongly.”

Almost as soon as the turkey is digested, thoughts turn to the Boxing Day sales. Zimmerman said this was a record post-Christmas period, with more $15.1 billion spent between Christmas and 15 January 2014.

Zimmerman predicted a sluggish start to retail trading in 2014, due to continued uncertainty brought about by a hostile Senate, before a strong close to the calendar year. Much of his optimism is due to the rebounding housing market.

“Housing is very strong at the moment,” he said. “We are seeing houses being sold before they go to auction and there would appear to be a shortage of housing for first homebuyers. As people enter the housing market, they buy new household goods.”

Craig Woolford, an expert in retail analys at Citi Research, said while the results were encouraging, the industry should not get too carried away.

“Our industry feedback suggests JB Hi-Fi was the most popular retailer this Christmas,” Woolford said. “Fashion struggled, while David Jones did better than Myer. 

“Overall, Christmas spending likely grew by 3-to-4 per cent — better than the previous three years — but by no means a boom. Investors should tread cautiously in 2014 because retail profit-to-earnings ratios have risen ahead of any sales recovery.”

In related news, Woolford expects the earnings outlook Harvey Norman, Premier Investments (Just Group), Super Retail and the Speciality Fashion Group to benefit from a favourable exchange rate between Australia and New Zealand during the first half of 2014.

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In franchising news, Federal Minister for Small Business, Bruce Billson has reaffirmed the Coalition Government’s support for this $131 billion sector in an interview with the Australian Financial Review ($$$). Following a review of the Franchising Code, the Federal Government is considering hefty fines for “bully” franchisors.

Kym De Britt, general manager of the Franchise Council of Australia, played a very straight bat in responding:

“We’re pleased to see the Coalition plans to capitalise on the momentum created in 2013. The submission and consultation process allowed input from all over the sector. Franchisors, franchisees, academics, small business associations like our own, and other stakeholders all took the opportunity to contribute to the review, resulting in fair and robust recommendations.”

The Franchising Council is also reminding interested parties that time is running out to join the Australian delegation at the 54th Annual International Franchise Association Convention, being held in New Orleans, in the United States, from 22 February through 25 February.

While all companies seek to improve supply chain efficiencies, a new trend has emerged of retailers and suppliers looking at supply chain ethics. A major influencer of this was the shocking revelations stemming from Four Corners’ investigation into Bangladeshi clothing manufacturers in June 2013.

Sedex is not-for-profit online database of intelligence and insights on four key areas: labour standards, health and safety, the environment and business ethics. Its first Australian supermarket member is ALDI, which announced its membership earlier this week.

“As a discount retailer we are active globally through both our expanding market presence and our increasingly diverse supply chain,” said an ALDI Australia spokesperson.

“We are now taking the additional step of examining ethical standards of our supply chain by requiring suppliers in a number of categories to provide independent third party social audits. 

“The continued globalisation of our supplier base means that our membership with Sedex will assist in managing this increasing complexity whilst maintaining our ethical standards.”

For more information on ethical sourcing, check out this article from RetailBiz’s network: Why ethical sourcing is important and how to improve supply chains

Quote of the Day

“Cold hard cash or cold hard rock, what are you going to choose this summer?”

Ice creamery franchisor Cold Rock is asking the big questions as part of the company’s summer Facebook promotion that includes a $10,000 cash prize. 

Image of the Day

Baker’s Delight general manager and electric guitar tie aficionado Gerry Gerrard wants to attract more franchisees through the company’s Manage to Own training and development program.

“Renewed optimism in the job market demonstrates positive signs for 2014, and we are offering 100 new places within our industry leading development programs, providing an opportunity for a fresh start for job seekers in a growing market,” Gerrard said.

Video of the Day

Officeworks is on TV at the moment promoting Back To School products — pencil cases, sharpeners, crepe paper and 128GB iPads, for example — and it’s rounded up some cute kids to tell us what they want to be when they grow up. Spoiler Alert: he can’t quite pronounce palaeontologist:

From the RetailBiz network…

The Australian Hotels Association is warning against a “knee jerk” response to alcohol related violence, according to The Shout,  which also has a yarn about $70,000 worth of booze being lifted from a Sydney distribution centre

Implementing a ‘just in time’ stock management system is one of nine tips to improve cashflow in the most recent e-dition of FAD Quarterly, the online bible for fitout and design.

And for those interesting in gadgets, Appliance Retailer is at the 2014 International CES in Las Vegas, where intrepid reporter Claire Reilly filed a story on four major trends that will define the consumer electronics industry in 2014