By Claire Reilly
Over the past year, Radio Rentals has seen an increase in revenues, earnings and customer loyalty, with the retailer focusing on new store formats and a reconfiguration of its store spaces to entice consumers. But despite this, the company has not escaped the downward shift in retail conditions that has seen more consumers facing financial hardship and struggling to make repayments.
Thorn Group, parent company of Radio Rentals and Rentlo, today released its annual report, reporting growth across the business — both in bricks and mortar and online. But despite the positivity on growth and figures, the group noted that the retail sector remains tough.
“Radio Rentals…has defied industry trends and once again posted record revenue, installations and earnings for financial year 2013,” the annual report read. “This is very positive given the ongoing challenges in the market, which has resulted in poor retail conditions for a number of years.
“National consumer confidence is not only at low levels but has remained low for several years, with higher costs of living, particularly utility costs, continuing to have an impact. As an example, electricity costs in some states have increased around 80 per cent over the past four years, making it harder for families to budget.
“Also, whilst the business has continued to maintain its enviable performance in arrears and bad debt management, consumer defaults have increased across the general community along with hardship requests. This is clearly evident in the area of telecommunications and utilities, which reflects poorly on the true state of the economy.”
Although the company painted a grim picture of the current retail climate, it said Radio Rentals was well placed to continue performing strongly, thanks to a strong presence online (with 90,000 monthly visits to the company’s websites), the recent remodelling of the majority of stores across the network, and a change in the way Radio Rentals and Rentlo stores are designed.
“Store layouts are now more lifestyle oriented with furniture being a key focal point and reflecting how products would appear in a customer’s home,” the report detailed. “Improved logistics has also created the flexibility to pursue expansion of ‘one person branches’ in regional areas and ‘kiosks’ in malls in new metropolitan suburbs that provide a low entry cost model as we build critical mass in the area.
“In addition to a national branch network, our investment in enhancing our website continues to prove successful, with around 70 per cent of new rental enquiries coming from online and telephone and our website recording over a million visits a year.”
Considering its assessment of the troubles currently faced by consumers, Thorn Group said it was ensuring customers were “not over committed” by enacting a “Responsible Rental Policy” that matches consumers with products to suit their budget.
“The poor state of the economy combined with concern for customers who are faced with undue financial pressures led us to introduce a hardship contract in the past year, which has been helpful in assisting customers at a time of need by giving them extended terms. This initiative has been well received by customers along with store staff who build solid relationships with their customers and community.”
This article first appeared on Current.com.au