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Stock Shortages Now Omicron Challenges Retailers, David Jones Speaks Out

Harvey Norman, The Good Guys, JB Hi Fi stores, along with David Jones and Big W, are now showing the effects of shortages plaguing the CE and appliance industries with several leading brands missing from stores.

David Jones, the nation’s second-biggest department store, admitted at the weekend that they are facing shipping delays from China with some stock up to a month behind schedule with real concerns that stock will not hit shelves in time for peak holiday season shopping.

The David Jones delays were disclosed by Roy Bagattini, chief executive of Cape Town-based Woolworths Holdings, in an investor call with local analysts in South Africa on Friday night.

“Australia, yes they do get a lot of their sourcing from the China base, and we are experiencing on average between two to four weeks delay in bringing new product in and that it’s important obviously from a newness perspective and a refresh perspective as we go into different selling moments for us,” Mr Bagattini said.

A visit to stores in Sydney revealed stores without stock of digital cameras, Netgear routers and leading brand notebooks.

Also in short supply were TV’s and soundbars.

Retailers who now face the uncertainty of the emergence of the Omicron strain of Covid-19 are now being warned to hold their nerve and not “over-reaction” to the threat.

“Let’s hope consumers don’t panic” said one retailer at the weekend.

As thousands of returned Australians went into isolation for three days to limit the risk of an Omicron outbreak spreading from southern Africa on to our shores, the emergence of a new Covid-19 variant threatened to derail a powerful recovery that has seen consumers flock back to stores and online buying, economists said.

Australian Industry Group chief executive Innes Willox said federal and state authorities should take a targeted approach against Omicron or risk “devastating” businesses desperate for ­stability after nearly two years of disruptions.

“This is not like it was back in February and March of 2020. We now have good knowledge, good advice, the uncertainties are not like they used to be, we have good systems.”

“While some caution is understandable, the response to any new and inevitable variant needs to be targeted, proportionate and take into account the nearly 90 per cent of us are vaccinated and tired of lockdowns and border closures,” Mr Willox said.

“We are just getting our economy back on its feet, but investment and confidence are still uncertain. An over-reaction both in terms of timing and proportionality around shutting Australia off from the world, and state from state, would be devastating.”

National accounts figure on Wednesday will provide a final reckoning of Delta’s immense damage to the economy through the September quarter.

Josh Frydenberg said the ­nation was well-placed to withstand the emergence of the new strain, which has triggered travel bans around the world on visitors from nations in Africa’s south and the reimposition of mandatory mask wearing in Britain.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar described the 72-hour quarantine on overseas arrivals implemented in NSW, Victoria, and the ACT as “a sensible precaution”. But Mr McKellar also warned that “with international and domestic border closures finally reopening, business cannot afford to take a backwards step.”

“State and federal leaders must stick to the national plan to get Australia back open, and to stay open,” he said. “Continuing to drive up the vaccination rate and encouraging everyone to get a booster shot is the best way to protect the population, rather than imposing further restrictions

David Jones senior executives don’t believe there is a possibility of empty shelves, shipping delays are causing a headache just at the time the retailer has come out of lockdowns in NSW and Victoria and is focused on the crucial Christmas trading period.

Recent commentary from equity analysts at Macquarie, however, suggests inventory levels at other retailers including Kmart, Target and Bunnings remained strong ahead of Christmas.



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