Talking Point: Retail apocalypse? More like a correction. And we can all help

LOUISE GRIMMER: It’s not just big retailers closing, small shops are feeling the pinch, but we can help keep our local businesses

CHANGE: It’s a tough time for retail, but focus on a broader experience might be the future of thriving local shops.

RETAIL apocalypse. Retail bloodbath. Yes or no? Certainly the year has not started at all well for a number of high-profile retailers.

We are still only in January and Jeans West, EB Games, Bardot and Curious Planet have all announced closure. This comes hot on the heels of a disastrous 2019 during which the Australian retail industry saw dozens of big-name retailers including Harris Scarfe, Dimmeys, Ed Harry, Napoleon Perdis and Co-op Bookshop shut up shop and leave the industry. Retail closures are not just happening in Australia. If you follow the UK and US media you’ll know that high streets and main streets throughout Britain and America are also suffering with almost weekly announcements of large, and often historic, retailers closing down.

The reasons for what is happening in retailing in Australia are myriad, but include a weak economy, stagnant wage growth, flat consumer confidence, increases in online shopping, store consolidations, continuous discounting, and the hollowing out of middle-tier retailers. Add the woeful Christmas trading results and 2020 is going to be really tough for the industry. Fashion and footwear retailers will be particularly exposed with strong competition coming from discount department stores.

Are witnessing an apocalypse though? Rather than an apocalypse, I think we are seeing a correction in the market. Yes, a very large correction, but not decima-tion. We are also witnessing how retailers are responding and adapting to market forces and changes in traditional modes of shopping. Of course, for some retailers it is too late to respond.

At this time of year industry experts, academics and commentators are traditionally asked to share their insights for the future of retail. What will 2020 and beyond hold for the industry and consumers? This year that question is even more pertinent than usual. The consensus appears to be that retail is not dead, but it is certainly changing and those traders unable to adapt to the new retail landscape will be left behind.

There is also growing acknowledgment that where once the focus of towns and cities was predominantly retail, there is now a greater emphasis on changing the mix of cities. This means including other drawcards such as hospitality, leisure, community and cultural facilities, events and experiences, in addition to shopping. This is going to take time for universal acceptance, but we can no longer solely rely on retail to attract visitation. There will always be a place for innovative, interesting and compelling retail, and in the future it may be that those best placed to provide this are smaller and independent stores. But we need to support them to ensure they can survive, and thrive.

In the midst of sensational headlines about large retail chains collapsing, it is easy to forget that smaller retailers are also facing challenging trading conditions. They just tend not to make the news in the same way as their larger competitors.

Just this week I’ve been made aware of a number of iconic independent stores and eateries in Hobart announcing closure. This is really sad news. Their loss will be keenly felt, and unfortunately there will likely be others facing the same fate as the year progresses.

Small businesses dominate the retail industry in Australia, providing employment, choice for consumers and contributing to local communities. They are the very lifeblood of suburbs, towns and cities across the country. The retail industry has always been challenging for small traders, and at the moment it is incredibly difficult for those affected directly by the bushfires as well as those feeling the ripple effect from the sheer scale of the disaster.

Here in Tasmania we must keep the survival of small retailers and service providers top of mind. The importance of small firms to the Australian economy, as well as to the local communities they serve, cannot be overstated.

So, what can we as consumers do to make sure that we have healthy high streets and town centres, that our suburban shopping areas remain vibrant and that we don’t end up with generic cookie-cutter retail precincts full of national chains and not much else? One of the best things we can do is shop local. This simply means supporting local businesses, small stores and service providers whenever you can. Sure, in some instances it may cost a little bit more than shopping online or with a large national retailer, more often than not though, it is cheaper than we think. Your support of small business is vital if we are to keep variety, vibrancy and vitality in our suburbs and shopping precincts.

If we lose small businesses, especially retail and hospitality, we will all be the poorer for it. Think carefully about how and where you spend your time and money. It really can make a difference.

Dr Louise Grimmer is a Senior Lecturer in Marketing and a retail expert at the University of Tasmania.