The popularity of online sales worries retailers

Despite the Boxing Day promotions, Australian retailers remain sceptical about their prospects for 2012, citing online sales as a major concern.

A private survey revealed that both sales and profit expectations had fallen sharply from the same time last year.

56% of retailers reported that they expected online retail to affect high street retail trade, while a similar percentage expects slowing demand to exacerbate the problem, with the negative outlook for the global economy continuing to dampen the hopes of retailers and consumers.

A recent report on Australia’s expensiveness highlighted how restrictive tax measures made it economically viable for consumers to order regular consumables offshore and have them sent into the country. Incidentally, the UK government recently moved to close a tax loophole that has made the Channel Islands (situated off the south coast of England) a haven for mail order goods. Independent retailers have long claimed that this was an unfair exploitation of tax regulations and majorly detrimental to competition.

Aussie high street retailers also encounter expensive overheads that may not be applicable to internet-only retail operations, which further prohibits their competitiveness.

Thoughts need to go into the restoration of the high street in 2012, as retailers fear low demand and more convenient alternatives for consumers.

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Joe Letts