THE REVOLUTION IN RETAILING

Press, Volume CIII, Issue 30342, 18 January 1964, Page 9

THE REVOLUTION IN RETAILING

Australia’s Big Stores Have Huge Turnovers [By CLIVE TURNBULL, of the Australian News and Information Bureau] ONE of the most interesting aspects of Australian business in recent years has been the development of retailing, both in magnitude of operation and in diversification of method. The size and quality of Australian shops and the attractions of this branch of the economy as a field for investment are features of a scene which, over-all perhaps most resembles the American, although it has characteristics of its own. It is probably surprising to visitors, for instance, to find that Australia, with still fewer than 11,000,000 people, has one of the largest department stores in the world, Myer (Melbourne) Ltd., the parent store of the Myer group, which is believed to be the fourth largest store in the world and the largest outside the United States of America. The Myer group, which extends over five states, had itself a turnover of £A114,350,000 in the year to July 31, 1963. Purely as an instance of volume of trade, Myer (Melbourne) and its major national rival, Sydney-based David Jones Ltd., are reputed to sell more shoes than any stores in the world.

Australia began with two types of shop, the city drapers, some of whom still flourish afto- a hundred years of trading, with complementary small specialist businesses in groceries and hardware; and. in country districts, the general store. This, as its name implied, sold everything, and the storekeeper, not always with enthusiasm, 'was often a kind of banker to the district, supporting the grazier and farmfer from season to season The revolution in city retailing began with Sidney Myer who acquired an old and small business in centra] Melbourne just before the First World War and built it into a huge store on modern lines, with many departments under one roof. Pattern Altered Myer altered the pattern of city retailing, bringing into the city centre thousands of shoppers who had formerly made their purchases in the inner suburbs, with the consequent decay of some of these older shopping areas. Sidney Myer was a merchant of genius and his business has attain-'d international status, not only dominating the Australian department store scene but. through its London subsidiary, buying in Europe for other stores in New York. Switzerland, Holland, Belgium, Africa, New Zealand, and the heart of world fashion, Paris herself. There are other vigorous department store groups, many of which, like Myer’s, have ramifications in the Australian suburbs and the provincial cities. The 1920’s saw the coming also of the new-type chain stores, beginning in a modest way on the “five and 10” principle (“nothing over 2s 6d”) but gradually developing into wider ranges of more expensive merchandise.

Many ,Branches Of these chains, the two most notable are G. J. Coles and Company, Ltd., founded b - the Coles brothers, who still direct it, and Woolworths. Ltd. (no connexion with the American and British companies of the same name). These companies, which each count their large and varied stores in many hundreds—Woolworths alone have 812—and penetrate into all sections of Australian life, have become dominant factors in the commercial and financial scene: their entry into fooc retailing has been one of the most significant features of recent years. Other processes have also been at work. As in the United States, the mushrooming of outer suburbs and the congestion of the downtown areas have led to new demands which have been met

by decentralisation policies by the city retailers. What is still the largest of Australian regional shopping centres was opened by the Myer Emporium, Ltd., at the Melbourne suburb of Chadstone in 1960 on the American model, with a large free parking area, a department store conducted by the Myer interests and a shopping mall occupied by many of Myer’s city competitors as well as by a Coles store. £7m. Block Chadstone, a £7 million project on a 34-acre site, was an enormous success from the start and has been followed by other regional centres in Melbourne, Sydney and elsewhere, developed by Myer, David Jones and by other groups. As well, supermarkets have been established by the chains in many suburban key positions. Much speculation has naturally arisen as to whether the small individual trader can survive against the giants. The evidence so far is that individual traders do survive and even flourish when they adopt the protective devices of membership of a group buying organisation and the introduction of self-service. In effect, they set up chains of individuallyowned businesses. Whether the old leisurely . businesses of personally wrapped commodities can continue indefinitely is. another matter; no doubt there will always be room for traders of character selling quality goods.

Country Changes The character of the country store has likewise altered with increasing populations, readily available transport and the breaking down of the differences between city and country, life almost to disappearing point. Many country stores of old have become sophisticated department stores and a number have been swallowed up by the groups. In country towns where, not so many years ago, one of the most important purchases was salt for corning meat in pre-refrigerator days, there are now gleaming stores, some with escalators and air-conditioning.

Vast Benefits So the whole trading scene over Australia becomes more uniform and there is a tendency for the concentration of trading into fewer hands. If this perturbs people who. like a large field of competition, there is no doubt whatever that it has brought great benefits" through skilled group buying and has placed a very wide range of quality

goods before vast numbers of people. Nor is the field ever closed to newcomers. Sidney Myer was a newcomer in a field which some of his competitors had occupied for half a century and more. The latest newcomer of significance, the American Safeway interests, have made a cautious entry into the Australian scene by buying existing stores through their subsidiaary, Pratts Supermarket Pty., Ltd. Safeway, which now has seven stores in Victoria, has indicated that it will eventu-. ally make a public issue of shares in Australia, that it will build stores, of its own design and that eventually it hopes to have supermarkets in every major city in Australia.

Overseas Baying The lively retail scene has been of great benefit not only to local suppliers who naturally predominate, but to many overseas manufacturers of specialised lines who have found ready sale for their merchandise. The great Australian houses now maintain buying offices not only in traditional centres ■ such as London, Paris and New York but in Milan, Frankfurt, and Tokyo, with representation in numerous other cities in Europe, the United States and the East. Range Of Goods Australians have become accustomed to ranges of goods that were unfamiliar to them only a few years ago—ltalian silk wares and shoes, Japanese cameras, tape recorders and record-players, foodstuffs of many countries; indeed the best of consumer goods from many parts of the world. Part of this development may be ascribed to the large admixture of people from the Continent who have come in as migrants in the post-war period. Most of it, however, is probably due to the natural keenness of merchants to supply the most attractive articles they can for a conspicuously affluent society.

The building which is now going on by retailers to cater for the demands of this society is probably the best index of Australia’s basic prosperity. The Myer group, for instance, is embarking upon another regional shopping centre at the Melbourne suburb of Preston which will be even bigger than Chadstone.

Keen On Prices This is but one of many projects proceeding throughout Australia to supply the needs of a society now entering the two-cars-per-family phase. If there is any feature which distinguishes it from the American, retailing scene it is the lack of impact by discount houses which is ascribed in some quarters to the fact that discount houses have not been able generally to break the manufacturers’ fixed retail prices—for example, tyres and many electrical goods. Moreover, manufacturers rigidly police the retail prices they fix. This makes tile orthodox Australian. retailer less vulnerable than his opposite number in some other countries.