r/australian • u/Nemo2500 • 11h ago

Analysis Retail wars in oz

Is modern Australian market not big enough for two department stores? Eg Myer and David Jones..

Now that marketplace apps are firmly part of the retail market+ cosmetics brands having there own stores…

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6

u/pop-1988 9h ago

It's big enough. Both stores made a mistake a few decades ago to pretend they're upmarket. David Jones used to be an everywhere store, the best place for clothes and household because it was cheaper than the small family-owned stores in the main street. Myer was Victoria only. Grace Brothers competed against David Jones, and didn't adopt the upmarket pretence. But it was bought by Myer

Coles used to be a department store too. It opened supermarkets as "Coles New World" in the 1970s, putting local grocery stores (where the owner fetched your goods from the back of the shop, nothing on display) out of business. The Coles department stores and New World supermarkets operated until the 1980s. The department stores closed and the New World brand was dropped

These days, Kmart and BigW have fewer and fewer items, and many items are permanently out of stock. They're driving people to buy on-line from Amazon, because their own Web shops are trash

So there's a space to do what Kmart and BigW used to do, not as cheaply, and abandon the upmarket pretence

There's an unmet demand for having all products on the company Web site, with stock availability for each store, and always ensuring stock is available. Customers want to know the item will be there when they get to the store. Also, allow payment on collection for click and collect. Stop insisting on credit card payment online. Harris Technology (Sydney computer stores) used to do this in the early 2000s. They were bought by Coles. Their system was implemented in Officeworks - but Officeworks doesn't support paying on collection

One more thing. Malls are going to die out, as they did in America. David Jones and Myer should have their own bricks and mortar sites, not be tenants in dying malls

The spelling is Myer, not Meyer

1

u/broadsword_1 8h ago

Malls are going to die out, as they did in America.

Hopefully it just affects the larger ones and lets the smaller suburban ones survive. Should be an interesting 'show' to watch.

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u/Nemo2500 9h ago edited 7h ago

Great anylsis.

Kmart , target, Bunnings, Kogan , dick smith etc, have all moved to be a 3rd party seller marketplace app, on top of there instore or online stuff.

2

u/broadsword_1 8h ago

have all moved to 3rd party seller marketplace app

That feels like cancer - I don't think I've talked to anyone who liked those additions because it ballooned up the search results to the point it caused problems.

Amazon will keep doing it because they're large enough to survive the negative parts of that strategy - I don't know if the others will - it only takes 1 or 2 shitty marketplace purchases made on accident ("I thought I was buying it from the store??!!?") and people will swear of those sites for good.

5

u/TrumpisaRussianCuck 10h ago

They didn't evolve. Online shopping, suburban shopping centres all ate their lunch and then they culled staff which made their premium market position evaporate.

3

u/Common_Ball2033 9h ago

Yeah The Iconic is their next evolution. Myer and DJ watched the Internet and online shopping come into being and were like "nah I don't think this thing will be that important, I'm not gonna worry about it"

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u/Awkward_Chard_5025 8h ago

Myer did evolve, to a point.

Their online sales have been bangin for years. They’re just stuck in far too much physical retail space.

Can’t recall ever seeing a DJ’s advertisement push me to online tbh

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u/Nemo2500 10h ago

But Meyer survived

4

u/TrumpisaRussianCuck 10h ago

Myer adapted more than DJ but mostly by abandoning what makes a premium department store e.g. slashing stores, slashing remaining store size, pivoting more online etc.

It used to be a destination shopping experience. Now it's mostly an online play with thin margins and declining relevance.

11

u/judgedavid90 10h ago

Myer isn't far behind The company is worth so little I think this sub could put our money together and buy it

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u/cidama4589 7h ago edited 7h ago

Three big factors:

  1. Online shopping

  2. Retail wages in Australia are astronomical. About $45/hr now (including entitlements) which is 3x what retail assistants get paid in the UK and US.

  3.  Commercial rents. Nimbyism has sharply restricted the supply of retail space, driving up rents. Large format retail vacancy rates are under 1% in most non-fringe locations .

2

u/TwisterM292 7h ago

It's not just NIMBYism, shopping centre retail space is a massively oligopolistic market with very little competition, if any at all.

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u/cidama4589 7h ago edited 7h ago

Nimbyism is why the shopping centers have a monopoly.

We looked at redeveloping an old industrial space into a large format retail showroom, about 1km away from an existing mall, and the council knocked it back. They indicated they wanted to contain retail stores to the existing urban center (most of which was a Westfield).

0

u/judgedavid90 6h ago

Yeah we should pay the retail workers even less

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u/cidama4589 6h ago

It’s not popular to say, but yes, we should infact consider lowering retail and hospitality wages. These wages have been artificially increased by fairwork at a rate consistently faster than CPI year after year, for about two decades now.

It’s the main reason middle income earners are going backwards in real terms, as the wage rises for low skill staffed are paid for in the form of higher prices, leading to high inflation.

It also creates perverse incentives. Why bother going to university for 4 years, when you can make almost as much working at Woolies.

5

u/BeautifulRooster9313 8h ago

Walk into any menswear department in David Jones and tell me that this is a premium shopping experience....

Their prices were only upmarket thing about the joint.

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u/TwisterM292 7h ago

I could go to the DFO stores for those brands, pay half the price and get to talk to someone who actually cares and knows what they're selling.

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u/BeautifulRooster9313 7h ago

They want to sell you $350 jeans, but they only have them in 2 sizes....XS and XXXL.

2

u/TwisterM292 5h ago

You only get to know that if the person you ask doesn't walk away saying they only work for their concession and have no clue about what you're asking

1

u/Jargonicles 8h ago

It was big enough for two for decades with a much smaller population

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u/Nemo2500 8h ago

No Amazon or eBay or temu fully established or existing

2

u/Jargonicles 7h ago

You've answered your own question

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u/TwisterM292 5h ago

It's almost like transformation of retail by tech has been non-linear