Big W Sale 20-26 July

[UltraMarginal]

I think that's part of why so many people are shopping online these days. when the dollar slumped pretty much all retailers put their prices up, the dollar has improved much more than it slumped and there has been very little noticable change in pricing.

People are saying a collective "up yours' to retailers and going elsewhere. I know I look online first for a lot of things.

[Hursticon]

I think that's part of why so many people are shopping online these days. when the dollar slumped pretty much all retailers put their prices up, the dollar has improved much more than it slumped and there has been very little noticable change in pricing.

People are saying a collective "up yours' to retailers and going elsewhere. I know I look online first for a lot of things.

You're dead right UltraMarginal, good to see you back by the way , but they'd rather have you believe it's the 'Big New Scary Tax's' and Online Retail's fault...
Rather odd though that they should re-instate their sales prices though, maybe they still had a crap load of stock to get rid of?

[STL]

I think that's part of why so many people are shopping online these days. when the dollar slumped pretty much all retailers put their prices up, the dollar has improved much more than it slumped and there has been very little noticable change in pricing.

People are saying a collective "up yours' to retailers and going elsewhere. I know I look online first for a lot of things.

You're dead right UltraMarginal, good to see you back by the way , but they'd rather have you believe it's the 'Big New Scary Tax's' and Online Retail's fault...

Rather odd though that they should re-instate their sales prices though, maybe they still had a crap load of stock to get rid of?

Not that I disagree with shopping online but I think it's a bit unfair to point to the exchange rate as the retailers are screwing us over.

The problem with physical retail versus online is that most people we end up buying online from are based overseas. There's a good reason for that. Their cost to serve is much lower than that of Australian retailers who have only physical presences.

Overhead needs to be satisfied to generate relevant scale otherwise cost bases are higher relative to countries such as the US/UK which have larger populations, lower costs to serve. IE. the whole economies of scale argument. Economics 101: population matters.

Australia has very unique geographic features too such as great distance between cities and lower densities which add to the distributional infrastructure costs that large retailers need to invest in and support with little benefit.

As such, I do think retailers do have a hard time and our prices are higher to reflect that. It's quite unfair to say that they deliberately go out to screw us. Of course, they profit at our expense but who doesn't? If you ran your own business, wouldn't you? The same goes for businesses domiciled overseas though and I assure you those businesses try to screw us as much as our local retailers. However, our local retailers are encumbered by problems systematic to the Australian economy and therefore have to charge higher prices.

That's not to say they shouldn't change the terms of the game. They should but they haven't and that's why they are suffering against overseas alternatives and seeing profits decline. They stuck to the short term and within a decade, many Australian retail jobs will disappear. Unless replaced by a new structural change, up to 50% of current retail jobs will vanish and those employed by those industries will go unemployed. Look to the US where the structural issue is already settling in. Australia will be far worse and I can tell you now mining will not save us. Mining is short-term and myopic, it will not be the basis of our future economy. Aussie Retailers pointing the GST, the carbon tax and the mining tax are nothing short of idiotic. The real issue is that they need to reconsider their business model. That takes pain but as we know, sharemarkets only reward short-term gain. They can keep whinging but that will do nothing except ensure their eventual demise.

[Hursticon]

That is a far better detailed explanation than my own STL and I thank you for sharing it with us as it reflects, albeit in better/greater detail, my own feelings that it is indeed the business model that needs to change in Big Australian Retail.

As you've said, they've shot themselves in the foot by sticking to a clearly outdated model for so long and are now feeling the pinch, which will turn into a vice-grip in very little time by the looks of things.
I think if small and medium business are able to take notice and mold their models around such emerged trends, then they'll be far better positioned to become the big businesses of tomorrow - Which would be a very welcomed change from the Duopoly of Retail, present in so many sectors of this country.

So do you think that this recent 'spot-sale' price drop is purely to compete with Target or to just clear stock?

[yoshi594]

I'd be more happy with this if my Big Ws got some new waves in

this sums up big w for me at the moment. Shame the cyberverse commanders aren't back on special.

[Decepticon]

Big W have a load of rubbish anyway. They don't sell Bumblespud!!

[STL]

That is a far better detailed explanation than my own STL and I thank you for sharing it with us as it reflects, albeit in better/greater detail, my own feelings that it is indeed the business model that needs to change in Big Australian Retail.

As you've said, they've shot themselves in the foot by sticking to a clearly outdated model for so long and are now feeling the pinch, which will turn into a vice-grip in very little time by the looks of things.
I think if small and medium business are able to take notice and mold their models around such emerged trends, then they'll be far better positioned to become the big businesses of tomorrow - Which would be a very welcomed change from the Duopoly of Retail, present in so many sectors of this country.

So do you think that this recent 'spot-sale' price drop is purely to compete with Target or to just clear stock?

I think it's largely b/c of the movie's success (from what I hear it'[s been received well by the mainstream) though timing with Target's doesn't hurt too but given the buzz around Target's sale and more items available from Target, Big W's isn't really a supply thing but a recognition it's a hot spot for toys at the moment b/c of a lot of brands with cinema presence atm.

[UltraMarginal]

You're dead right UltraMarginal, good to see you back by the way ,

Cheers, it's good to be back, though it's taking a while to settle in.

Not that I disagree with shopping online but I think it's a bit unfair to point to the exchange rate as the retailers are screwing us over.

The problem with physical retail versus online is that most people we end up buying online from are based overseas. There's a good reason for that. Their cost to serve is much lower than that of Australian retailers who have only physical presences.

Overhead needs to be satisfied to generate relevant scale otherwise cost bases are higher relative to countries such as the US/UK which have larger populations, lower costs to serve. IE. the whole economies of scale argument. Economics 101: population matters.

Australia has very unique geographic features too such as great distance between cities and lower densities which add to the distributional infrastructure costs that large retailers need to invest in and support with little benefit.

As such, I do think retailers do have a hard time and our prices are higher to reflect that. It's quite unfair to say that they deliberately go out to screw us. Of course, they profit at our expense but who doesn't? If you ran your own business, wouldn't you? The same goes for businesses domiciled overseas though and I assure you those businesses try to screw us as much as our local retailers. However, our local retailers are encumbered by problems systematic to the Australian economy and therefore have to charge higher prices.

That's not to say they shouldn't change the terms of the game. They should but they haven't and that's why they are suffering against overseas alternatives and seeing profits decline. They stuck to the short term and within a decade, many Australian retail jobs will disappear. Unless replaced by a new structural change, up to 50% of current retail jobs will vanish and those employed by those industries will go unemployed. Look to the US where the structural issue is already settling in. Australia will be far worse and I can tell you now mining will not save us. Mining is short-term and myopic, it will not be the basis of our future economy. Aussie Retailers pointing the GST, the carbon tax and the mining tax are nothing short of idiotic. The real issue is that they need to reconsider their business model. That takes pain but as we know, sharemarkets only reward short-term gain. They can keep whinging but that will do nothing except ensure their eventual demise.

I think you have a fairly good argument, the business model here needs to change, though there are some contradictions. I can buy a video card from a small retail front computer store for probably 20-30% less than I can get one from Harvey Norman. Transformers ship from asia, Australia is a lot closer than the States and they literally pay 40% of what we pay for Transformers. Are we covering the cost of shipping to the states?

The other big one is that import duties in Australia are huuuge. I think our government needs to consider lowering import duties on certain things that are not produced here, a perfect example is musical instruments, toys and other household goods. In some cases this can make it harder for Australian companies to compete which should be avoided if possible but at the same time so many of our companies already manufacture overseas so what is the point of the duties?

JB hi fi sells cd's and dvd's at a very low price compared to other retailers, I'm pretty sure their sales model is volume based. I do know that their tv and home theatre crazy prices are making it hard for other Australian retailers to sell things at a profit, how can they afford to do it and others not?

[Seraphim Prime]

That's not to say they shouldn't change the terms of the game. They should but they haven't and that's why they are suffering against overseas alternatives and seeing profits decline. They stuck to the short term and within a decade, many Australian retail jobs will disappear. Unless replaced by a new structural change, up to 50% of current retail jobs will vanish and those employed by those industries will go unemployed. Look to the US where the structural issue is already settling in. Australia will be far worse and I can tell you now mining will not save us. Mining is short-term and myopic, it will not be the basis of our future economy. Aussie Retailers pointing the GST, the carbon tax and the mining tax are nothing short of idiotic. The real issue is that they need to reconsider their business model. That takes pain but as we know, sharemarkets only reward short-term gain. They can keep whinging but that will do nothing except ensure their eventual demise.

Additional forces at work include the two speed economy we are currently in. Retail, as a service industry, hasn't changed, the issue is that mining is making our economy very attractive to overseas investors, raising the value of our dollar against that of other countries. (An outside issue is how we use the money in the mining industry to support those other industries that we will need when then mining money is gone

However, even though the value of the dollar has gone up, this doesn't mean the savings are being passed on to the stores either. Without revealing the exact mark-up (which pays for wages, rents, and other overheads), Aussie retailers are being charged more than what American consumers are charged at their retail store.

Part of the issue is probably that Aussie retailers are expected to order from the Australian distributor, rather than the overseas HQ. In that, Hasbro AU is probably partially to blame for the current prices as they are passing the exchange rate savings on to retail who in turn can't pass it on to the consumer. Though to be fair to Hasbro, they do try to give us the best price possible on the new entry points figures (like Masterpiece Rodimus / Ultimate Optimus Prime).

Lastly, Target only has a 30-day change of mind return policy, meaning if you get a better deal more than 30 days after your purchase, too bad.

As far as I'm aware this was removed about 7 months ago and now there's no limit to change of mind returns as long as the packaging is still intact.

[bowspearer]

Not that I disagree with shopping online but I think it's a bit unfair to point to the exchange rate as the retailers are screwing us over.

The problem with physical retail versus online is that most people we end up buying online from are based overseas. There's a good reason for that. Their cost to serve is much lower than that of Australian retailers who have only physical presences.

Overhead needs to be satisfied to generate relevant scale otherwise cost bases are higher relative to countries such as the US/UK which have larger populations, lower costs to serve. IE. the whole economies of scale argument. Economics 101: population matters.

Australia has very unique geographic features too such as great distance between cities and lower densities which add to the distributional infrastructure costs that large retailers need to invest in and support with little benefit.

As such, I do think retailers do have a hard time and our prices are higher to reflect that. It's quite unfair to say that they deliberately go out to screw us. Of course, they profit at our expense but who doesn't? If you ran your own business, wouldn't you? The same goes for businesses domiciled overseas though and I assure you those businesses try to screw us as much as our local retailers. However, our local retailers are encumbered by problems systematic to the Australian economy and therefore have to charge higher prices.

That's not to say they shouldn't change the terms of the game. They should but they haven't and that's why they are suffering against overseas alternatives and seeing profits decline. They stuck to the short term and within a decade, many Australian retail jobs will disappear. Unless replaced by a new structural change, up to 50% of current retail jobs will vanish and those employed by those industries will go unemployed. Look to the US where the structural issue is already settling in. Australia will be far worse and I can tell you now mining will not save us. Mining is short-term and myopic, it will not be the basis of our future economy. Aussie Retailers pointing the GST, the carbon tax and the mining tax are nothing short of idiotic. The real issue is that they need to reconsider their business model. That takes pain but as we know, sharemarkets only reward short-term gain. They can keep whinging but that will do nothing except ensure their eventual demise.

I get what you're trying to say STL, but the problem is that history makes your entire argument moot. All those factors you mentioned existed in the 90s (the carbon tax hasn't been implemented yet and the GST actually replaced a 22% sales tax whixh actually lowered retail prices slightly) and the dollar, up until the Asian economic crisis had been worth just under RRP of $10, deluxes $17, megas $30 and ultras $40.

Then the AEC hits and prices rise to match the exchange rates, at one point, deluxes go for $36.

So where are we at now? Our exchange rate has us higher than parity and these days international frieght costs are virtually identical with Hasbro's toys being made in China. Furthermore, Hasbro's US RRPs have been virtually unchanged in all that time.

All thing being equal and basing things on a parity exchange rate, a quick conversion by multiplying by 0.8 shows that basics should be $8, deluxes $14, megas should be $24 and ultras should be $32.

It's interesting to note that these prices are similar to what's often seen during toy sales.

In short, the reason we don't is because either Hasbro or the larger retail buying groups, "forgot" to adjust their RRPs and because the ACCC is so useless, noone is likely to take them to task over it any time soon.