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Foot Traffic Slows, As Mall Shoppers Stay Home

Shoppers are opting to buy online or purchases good from smaller stores in a bid to avoid large shopping centres, a situation that has added to the stress of retailers, already exacerbated by global supply chain issues.

Half-yearly reports from JB Hi-Fi, Myer, David Jones, and Kmart are among those bemoaning the impact of forced store closures, decreased foot traffic due to Omicron, and supply chain issues on their bottom lines.

Consumer confidence declined 7.6 per cent in January, to a below-average 97.9, according to a ANZ-Roy Morgan survey.

“Consumer confidence readings are usually positive during the month of January and the level of 97.9 is the weakest January result since 1992, when the Australian economy was experiencing sharply rising unemployment,” ANZ economist David Plank said.

Australian Retailers Association chief executive Paul Zahra, said retailers can no longer rely upon a “just-in-time” suuply chain setup.

“That’s definitely gone kaput,” Zahra said.

“There’s no doubt the toughest job in Australia in retailing at the moment is trying to forecast inventory.”

Stocking up causes inventory bloat, as Kogan experienced last year, which increases warehousing costs.

“If you buy too much product then you end up having to discount,” Zahra adds.

A recent ARA poll found 63 per cent of retailers were concerned about the next three months, with 62 per cent describing current conditions as either “terrible” or “poor”.

As Zahra explains, online-only stores are also suffering from having to second-guess how much stock is enough, with Kogan.com copping $158.5 million in warehousing costs over the last six months of 2021.

“The outlook is not great,” Zahra said.

 

 



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