Why Aussie retailers could go bust without government support
Major Australian retailers could be at serious risk of permanent closure as stores go into lockdown and worried consumers tighten their purse strings. Here’s what’s worrying insiders most.
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Retail bodies have warned that iconic Australian stores could go bust if the government doesn’t act to help struggling larger businesses.
The Australian Retailers Association (ARA) and the Shop, Distributive and Allied Employees’ Association (SDA) called on the government to announce an additional rescue fund specifically for the retail sector amid the coronavirus crisis.
ARA’s Executive Director Russell Zimmerman said that fashion retailers could face the most risk as stores go into lockdown and worried consumers tighten their purse strings.
Mr Zimmerman said that while he welcomes Scott Morrison’s business rescue package announcement, there isn’t enough being done to help larger retailers.
“It’s an excellent package but it does not cover some of the bigger business that we’re dealing with that, if this continues, will unfortunately head into liquidation,” Mr Zimmerman told the Herald Sun.
“I’m talking about iconic brands here … If we lose these businesses, where are we going to re-employ people when this is over.
“I have been in discussions with retailers in the large sector who are extremely worried, particularly at this point in time, there is concern in the discretionary spend retailers – so clothing, footwear, accessories.”
The ARA and SDA are proposing the government sets additional resources aside for a retail specific rescue fund which will be distributed by a task force.
“We accept the principles that the money must be directed at the business feeling the most pain and the detail of that would be dealt with by the task force at which the government would have a seat,” SDA National Secretary Gerard Dwyer said.
The union chief said that fear is growing among retailers after Sunday’s announcement of the closure of non-essential services across Victoria and New South Wales.
“Just this morning I was talking to a casual employee who’s gone from 30 hours a week now to a single shift of three hours,” he said.
“Some essential services are obviously in retail, such as the supermarkets and pharmacies, but so much of the sector would be affected by the lockdown.
“There can’t be any restriction [in the rescue fund] based on size, this has to be offered to any retailer facing an existential threat.”
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