Retailers see cause for optimism this year

Press, 6 March 1984, Page 26

Retailers see cause for optimism this year

There was more cause for optimism this year, the national president of the Retailers’ Federation, Mr L J. Halsted, told the annual conference in Ashburton yesterday. Retailers were living with an accelerating rate of change, he said. Profitability depended on how they adapted to that He spoke of three dominant trends: the impact of social change; a “flat” market brought about by static population and a listless gross national product; and the application of computer technology to industry, helping accelerate progress towards cashless shopping. Retailers had to offer a more exciting shopping environment to provide a more exclusive image and a more consumer-conscious service. But Mr Halsted questioned whether they were moving fast enough. There was increasing competition for the upper end of the market which included double-income families and young unmarrieds with discretionary spending power. Of Sunday trading, he asked why retailers did not take a short cut and stop regulation of hours by Government decree. The marketplace could sort out who remained open and when.

The problem of a “flat” marketplace was that all were competing for the same number of consumer dollars. Population had become static, profits had been frozen and the G.N.P. was not much warmer, Mr Halsted said.

The competition was rapidly polarising the industry, with a battle between cost-cutting efficiency of mass merchandising, and customer-service emphasis for those prepared to

pay for it. As well, there was growth in new types of outlets such as factory stores, flea markets, and service station

shops. Specialty stores did not have to fear. The growth of other shops showed there was still a share of the market for them. Technology offered one area for cost efficiencies, and he predicted stabilised energy prices would take the sting out of inflation. Easing interest rates would help to halt the migration of profits to finance institutions.

Coming out of the price freeze, these trends would help retailers hold ground, but it was up to retailers to make the freeze work on a voluntary basis. They could consider lowering expectations. They had become conditioned to strive for 15 per cent annual sales increases to “stand still.” Today, a modest 10 per cent rise in sales could give real growth of 4 per cent “The fact is that the price freeze has worked. We must think in terms of a more stable dollar,” he said.

Retailers also had “to stand up to” manufacturers who tried for substantial price rises. Customers had shown retailers the value of shopping around and he believed it was the latter’s responsibility to take a firm stand in their own and the community’s interests. He detected a stronger upswing in business than that evident in the previous two election years, and the Institute of ‘Economic Research

predicted improved employment prospects. Retailers could accelerate the recovery. They were the ones who could help manufacturers lift production. Given evidence of a recovered public confidence, it was within thenpower to stimulate the recov-

ery. The important word was “imagination.” Retailers had to use more of this.

Mr Halsted said he could see no justification for deferring the phasing out of import licensing. It had been estimated it was costing consumers two billion dollars.

The federation had consistently advocated that any phase-out agreement should be certain, consistent, and apply to all manufacturers. It also had to be soon.

“We need to burst this glasshouse of sheltered industries and develop industries based on the unique advantages of our natural resources. We need a commitment to bring more visitors here to develop a home-based market amid the most exciting package of tourist attractions to be found anywhere in the world. “We need a Government which will give a firm lead with policies aimed at growth and expansion, rather than protection and stagnation.” More people were needed, Mr Halsted said. A growing population had never produced unemployment; rather it increased demand for goods and services and created more jobs.

The executive director of the federation, Mr B. 1 Purdy, in the annual report told retailers that there had been a marked decline in population in the five years to 1981 and after a period of recovery, there was an indication that it was declining again. People had to think hard about immigration and push for an immigration policy even if it drew on the Asian area. He accepted that some might find that hard to accept. Selective migration would be employment creative, in spite of arguments to the contrary by the Federation of Labour.