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Australian Retailers Face Tougher Competition in 2018

organised warehouseThe entry of more global retailers in Australia will make the competition even harder for local companies in 2018, according to the Deloitte Global Powers of Retailing report.

Due to tougher competition, the National Australia Bank’s (NAB) index showed that the retail industry experienced negative business conditions in December 2017. Hence, local businesses need to think of different strategies to keep up, from adopting competitive pricing strategies to the use of heavy-duty longspan shelving systems.

Level playing field

The Deloitte report noted that over the last 12 months, many overseas retailers outside the top 250 global companies have set up business in Australia, according to David White, national leader of Deloitte’s Retail, Wholesale & Distribution Group. At least 38 of the top 250 have been operating in the country, which means local retailers may have struggled to keep their business afloat.

British sports apparel JD Sports, for instance, has five outlets in the country, said White. In the luxury retail segment, Swarovski and Tiffany & Co have expanded their presence aside from launching new brands in Australia. Other companies such as French retailer Décathlon debuted in the previous year with a physical store. Meanwhile, Amazon’s entry will stir greater competition in the e-commerce market.

Negative business conditions

Increasing competition in Australia may have led to unfavourable business conditions for the retail sector, but the overall environment for other industries stayed positive in December, according to the NAB.

Business conditions in the country remained mostly positive at +13 for the month. The NAB surveyed more than 400 companies for its index. The construction industry particularly noticed buoyant conditions, due to public investments and a strong residential property market.

Unless Australian retailers consider different solutions to improve product and service delivery, many local players will succumb to their overseas counterparts.

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