AS the number of store closures and job losses in Victoria increases almost daily, a Warrnambool university expert has warned south-west business operators that worse is yet to come.
“We are on the cusp of a very bad period in the economy with a subsequent flow-on effect on business and jobs,” Deakin’s marketing lecturer Michael Callaghan told The Standard.
“Pressure from online trading is only part of the problem.
“The real threat to survival is the economic downturn and I have a feeling governments are covering up the reality.”
One long-time Warrnambool business operator said yesterday that last month was one of the worst trading periods for 15 years.
Mr Callaghan urged business operators to take appropriate action to survive rather than shutting the doors.
He also challenged the city council to take a hands-on interest in the growing number of vacant shops.
As he spoke, south-west Retravision store owners were facing a future without their bulk buying division, Retravision Southern, which went into voluntary administration on Monday.
Another Warrnambool business, SSW Shoe Warehouse, looks like it has joined the list of closed stores after failing to reopen on Monday.
Retailing in general has been struggling in a nationwide slowdown in consumer spending, a shift to online shopping and nervousness over the impending carbon tax. Now there’s renewed fears of a wider global economic slowdown.
There are also local fears of significant job cuts in the TAFE sector as a result of cutbacks in government support for some courses.
Less than a fortnight ago Murray Goulburn announced the loss of 20 jobs at its Koroit factory because of tougher trading times.
Business strategist Daffydd Wiesner-Ellix, who last year warned traditional shop-based retailing would be hit hard by online competitors, echoed Mr Callaghan’s comments that worse conditions were yet to come.
He advised retailers to concentrate on providing customer service that was lacking in internet trading.
“A price war won’t work because the market is not a level playing field,” said Mr Wiesner-Ellix who runs the consultancy CBD Strategic.
“Service is an investment. The primary aim of delivering service is to create client loyalty.”
According to Mr Callaghan, retailers who usually relied on busy holiday periods to get them through would especially feel the pinch in non-holiday seasons.
“The reality is every business is facing tougher times ahead, especially in areas like Warrnambool where many rely on seasonal trends,” he said.
“Don’t just sit there in denial until it gets too late and then shut the doors.
“Learn from Melbourne where CBD retailers don’t open till 10am and have ceased some weekend trading rather than stay open when customers aren’t around.”
Mr Callaghan suggested landlords needed to be more flexible with their rent charges to keep tenants.
He also suggested the city council play more of a role in monitoring retail survival and help negotiate with landlords to keep a vibrant CBD rather than have it scattered with vacant shopfronts.
“A landlord must have rocks in their head not to reduce rent to keep the premises from going vacant,” he said.