Comment: Could Australia use a Mary Portas to revitalise its retail sector?

As retail continues to slide, what's next for the beleaguered High Street?

Australian retailers are becoming increasingly worried. Post-Christmas spending has risen slightly, but it has not been the gold-rush of trade that had been hoped for. Sales are expecting to slide up by around 2%.

Consecutive cuts in federal interest rates have failed to revitalise high street spending. In fact, consumer confidence deteriorated in December.

And yet, consumers are not hiding. Online commerce remains attractive, and retailers are fearful of the convenience and competitiveness that it offers. Consumers continue to spend on services and in restaurants. The problem, according to analysts, is that the high street experience is becoming dated and unfashionable.

Unfashionable Fashion

The UK retail experience is undergoing a similar problem. The UK government commissioned a report by Mary Portas, a leading retail expert, to assess the consumer experience of the typical British high street.

Portas’ exposure has grown in recent years through innovative television series, including 'Mary Queen of Shops'. Viewers have watched her revitalise failing businesses and agonise over those too stubborn to adapt.

"The model of the High Street is so outdated", Portas concluded of the current high street situation. "The 1960s are no longer here".

Her report, released recently, contains 28 recommendations for refashioning the UK high street in a way that meet the needs of today’s consumers.

These include relaxing the rules for entrepreneurs and independent traders to operate market stalls and units in the high street. It also proposes disincentives for landlords who leave shops empty, to encourage competitive rental rates for areas of lower demand.

There is also a desperate need for affordable town centre parking, with businesses themselves reporting that they thought parking provision was problematic.

Portas wants to see greater consideration for the high street and the town centre in neighbourhood planning, as part of a greater ideology to see community and retail management teams work together to create an integrated high street with local input.

Australians Turn Online

In Australia, some regions are still disadvantaged by state government legislation that prevent opening on Boxing Day, the start of post-Christmas sales and a vital time for retailers. This is expected to change in 2012.

Furthermore, some large shopping centres were closed on New Year’s Day – a surprise to many consumers who turned up and were left disappointed.

It is little surprise, then, that consumers are turning online, when stores remain inaccessible during public holidays.

According to CommSec, who monitors Commonwealth Bank’s debit and credit card transactions, online commerce increased by 36.5% in 2011 to $12.3 billion. This represents around 5% of total retail sales.

The Price Drivers report at the end of 2011 also pointed to the expensive nature of the Australian consumer experience. Parking in Sydney was identified as more expensive than London; cinema tickets were more expensive than all other countries examined; and a sample basket of goods saw Australia rank as second most expensive to Japan.

A further issue for Australian retail competitiveness is tax, which currently makes it cheaper to import goods into the country than to buy them domestically. There is also the high overheads faced by high street retailers. High costs of rent and labour feed back into the prices of goods.

The solutions for Australia’s high street, then, are not to be a carbon-copy of the UK. But undoubtedly some of the inherent problems overlap. Is it time for Australia to land a consumer-driven retail expert to harness the interests of retailers and consumers combined? This must be one serious consideration to keep the credit cards flying in store as well as online.

Keith McDonald
Which4U Editor

[Image courtesy of bisgovuk/Flickr]