Big department stores such as David Jones and Myer are facing increased competition in Australia from global retailers such as Zara.
Retail Doctor founder and chief executive Brian Walker points to Deloitte’s global Powers of Retailing report, which said that of the top 250 retailers, just 15 per cent had a presence in Australia. “That means there’s a lot more to come,” he said.
Nearly five years after cult denim retailer Gap opened its first Australian store in Melbourne, a steady stream of international retailers have invested in Australian bricks and mortar. The long list includes Sephora, H&M, Uniqlo, Zara, Topshop, Pottery Barn with Williams Sonoma, and Victoria’s Secret.
Mr Walker said the success of the international brands reflected Australian and New Zealander’s love of travel and awareness of these brands, as well as the online presence the stores had before launching. “Australian retailing is not facing a cyclical change but a large structural change,” he said.
Insight into trading conditions at department stores in the past six months emerged last week as South African-based retail giant Woolworths Holdings released its half-yearly trading update. Same-store sales at David Jones, which it acquired in August, contracted slightly by 0.1 per cent in the six months to December 28.
The question remains as to where shoppers will direct their newly found savings. Myer may welcome the competition, but UK chain Marks and Spencer is tipped to try and muscle in on their margins, and Mr Walker said they would start rolling out stores this year.