Retailers attack on online shopping is driven by self-interest, Choice

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by StreetCorner
04/01/2011

This Direct from update is from the consumer group Choice who today attacked the advertising campaign launched today by retailers against on-line shopping.

Streetcorner publishes "direct from" updates so you can make up your own mind about the statements from politicians and organisations like Choice. Streetcorner also invites you to publish your own stories on Streetcorner and be part of the news making process. When locals take the news into their own hands, a broader range of community stories are told, giving power back to the people.

Today's statements from Choice.

"Big stores need to lift game on prices, service & range CHOICE says the advertising campaign launched today by a group of retailers attacking the tax treatment of online overseas sales is an alarmist red herring driven by the self interest of some of the biggest players.

The consumer watchdog says the larger chains are seeking to hijack the debate on the future of Australian retail by crying poor over the GST-free threshold on low value imports and creating a scare campaign over retail jobs.

It says while the federal government’s plan for an independent productivity commission inquiry into the retail sector is the best way forward especially to protect the interests of smaller retailers in the debate.

“The big chains should recognise that it's their high prices, limited range and poor customer service that increasingly encourages people to use the internet,” says CHOICE’s Christopher Zinn.

“Consumers are simply chasing the best deal and the best service and often these days that is found online.”

For example, you can buy a digital camera online from Myer for $557 (including GST and delivery in ‘5-15 working days’). The same camera can be purchased though an Australian online retailer for $433.50 (including GST and delivery) – a saving of $123.50 or 22 per cent.

“This is not about GST. Major stores are not being forced by anyone to charge these high prices. This debate is about quality of service, competitive pricing and the inability of some retailers to understand the future of internet shopping.”

CHOICE says it's a distraction to suggest dumping the GST threshold will make everything right again in the shopping malls. The answer is for retailers in Australia to raise their game and to give consumers a fair go instead of giving them a hard time for seeking the best deals.

"Our message to consumers is don’t be fooled by this expensive ad campaign," says Zinn. "Compare the price of products from shop front retailers with those online – you will be surprised how much money you can save, even without going overseas."

*** *Purchasing the same camera (Canon IXUS 1000 HS) from Hong Kong through a company with Australia-based sales staff will cost you $346 (including delivery by FedEx in 1-3 days), a saving of $211 or 38% off the Myer price."

What do you think of big retailers like Harvey Norman attacking the GST threshold on on-line goods under $1000. Is the GST threshold really hurting small businesses or is this a scare campaign by the big retailers?


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TonyD posts

I am a defender of globalisation and market efficiency but no defender of the major retailers. It is ironic that the major retailers have engaged in this campaign. They had no moral or economic reservation in supporting the global sourcing of consumer goods in the 1980s and 1990s which saw the demise of many Australian manufacturers (including those in the textile industry). This shift was based on cost effectivness for the consumer and profits for the retailers. The arguments about the impact on Australian manufacturing employment was inconsequential to them. Now these retailers are running an argument that they are the defenders of Australian employment. This is a little less than credible. In fact they are seeking to exercise a market hegemony on imports into the country by imposing additional administrative costs on the consumer and government. The campaign is dishonest in its foundations. The fact is that the strong Australian dollar plus concern about the impact of local interesty rates has encouraged people to shop offshore for a limited range of items. it will not replace the entirety of what is available in local shops. Economically consumers are behaving rationally by reacting to strong offshore purchasing power and local concerns about things such as interest rates. Retailers who in many cases occupy extensive premises in overpriced shopping centres where perceived underperforming small businesses are often extinguished without any sentimentality need to understand that their campaign will have no consumer (voter - government please note) support. They need to completely revise their sales and marketing strategies.

Norman and Lowey et. al. have no regards for the facts. Till June 2010 Online Sales represented 3% of total retail sales in Australia. Of this 3%, 80% of online purchases were within Australia. So our chin flapping multi millionaires are whining about 20% of 3% of the total sales. Gees their horse studs must be doing very poorly, just like their collective mindsets. Further these recalcitrants want the laws changes to profit themselves.

UGG Tilbud posts


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