Sad reality facing retail workers

 

RETAILERS will not hire in the immediate future and look to downsize physical stores due to online business booming and fears of a second wave of COVID-19, experts predict.

It comes as the National Retail Association (NRA) this week said only a shocking 1 per cent of retailers will hire more people.

Businesses will look to downsize in the coming months, pivoting towards expansion into the online world meaning less money will need to be spent on physical stores.

The NRA estimates $3.4 billion in retail sales was lost in April nationwide during the height of the lockdown restrictions, with NRA chief executive Dominique Lamb saying the economic ramifications would be dire if the state saw the same spike that has been seen in Melbourne.

Dominique Lamb, CEO of the National Retail Association. Photographer: Liam Kidston
Dominique Lamb, CEO of the National Retail Association. Photographer: Liam Kidston

QUT retail expert Professor Gary Mortimer said business owners were exceptionally cautious and hesitant to rehire people with the prospect of a second wave causing them to be stood down again.

Businesses are subsequently hedging their bets by channelling into the online market, with many retailers closely evaluating their physical assets instore, Prof Mortimer said.

He said retailers like David Jones have previously reported about 10 per cent of their revenue comes from online.

"If we look at Accent Group - they have about 500 retailers like Footlocker, and they've already indicated they plan to reopen most of their stores but not all of them - they looked to permanently close about 29 of those stores," he said.

"So if you're a retailer and you have five or six physical stores, and 12 or 15 per cent of your revenue is coming from online, you could potentially close one of those stores and not really attain a material loss."

Queensland University of Technology's Dr Gary Mortimer.
Queensland University of Technology's Dr Gary Mortimer.


Chamber of Commerce and Industry Queensland economic advisor Jack Baxter said many businesses are still unable to rehire staff due to restrictions on their operations and utilisation of their services.

"Retailers are still operating within restricted conditions and restrictions will have implications on how many employees retailers need," he said.

"Until COVID-19 restrictions are relaxed further, employment intentions will remain contained for the retail industry

irrespective of encouraging retail sale figures for the state."

NRA chief executive Dominique Lamb said it was difficult to gauge when businesses will be able to start rehiring.

"The developments in Melbourne, along with the reimposition of lockdown measures, shows how quickly a second-wave can occur," she said.

"If we were to see that spike in infections spread to other parts of Australia, it would only further debilitate the economy and prolong any recovery."

Designer store Calexico was the last store standing in the iconic James St shopping precinct during COVID-19, with owner Nicky Chairman attributing huge online sales of tracksuits, casual wear and pyjamas the key reason for staying afloat.

Ms Chairman said although the store remained open during the pandemic while others closed, they sold out of pyjamas online in the first week of the virus outbreak.

Now, the store is revolutionising by placing a heavy emphasis on online strategy, with Ms Chairman saying the fashion industry will change to become more sustainable focused.

"I think now people will take a step back and look at quality over quantity and focus on sustainable clothing," she said.


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