Australian supply chains unsustainable: ARA


Australia’s supply chains need to change, says the Australian Retailers Association executive director Russell Zimmerman

Australian supply chains unsustainable: ARA
Australian supply chains unsustainable: ARA
By Sean Muir |
August 1, 2012



The Australian Retailers Association (ARA) executive director Russell Zimmerman says Australia’s supply chain models are unsustainable and need to change if retailers are to survive.

Zimmerman made the comment following a parliamentary inquiry this week on why Australians pay more for technology than Americans.

The Standing Committee on Infrastructure and Communication’s
inquiry had received more than 80 submissions on Monday, most from Australian consumers reporting mark-ups on technological goods.

But while consumers and politicians criticize
sellers for charging Australians more than overseas consumers, Zimmerman points
to Australia’s additional supply chain costs, which he says inflate retail prices.

"The actual cost of doing business in Australia is far, far greater," Zimmerman says.

"The supply chain all the way through; the labour costs for the retailer, penalty rates, and the transport costs are more expensive."

Zimmerman says cost-related problems with Australia’s supply chains
are compounded by
consumers
being able to go online
to easily compare Australian prices with those overseas.

"Where you have the problem now is that the price is very price comparable anywhere in the world," he says.

"You
can look
at
a product price in
Australia
and say 'hang on, someone is making a killing out of this, how come the retailer is selling it for a lot more than what it
is out of China or somewhere like that?'."

Zimmerman says Australian retail rent is too high, with most retailers renting premises at supermarkets paying the consumer price index (CPI) plus two percent.

But he says in retail areas like clothing and footwear, annual growth is just over 1 percent.

"Is that model sustainable?" Zimmerman says.

"I think things will change. I think there will be a change from landlords, and I think there will be a change on how we do business in the future."

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