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Why prices are so high – 8 ways retail pricing algorithms gouge consumers

<a href="https://theconversation.com/profiles/david-tuffley-13731">David Tuffley</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> The just-released report of the inquiry into <a href="https://pricegouginginquiry.actu.org.au/">price gouging and unfair pricing</a> conducted by Allan Fels for the Australian Council of Trades Unions does more than identify the likely offenders. It finds the biggest are supermarkets, banks, airlines and electricity companies. It’s not enough to know their tricks. Fels wants to give the Australian Competition and Consumer Commission more power to investigate and more power to prohibit mergers. But it helps to know how they try to trick us, and how technology has enabled them to get better at it. After reading the report, I’ve identified eight key maneuvers. <h2>1. Asymmetric price movements</h2> Otherwise known as <a href="https://www.jstor.org/stable/25593733">Rocket and Feather</a>, this is where businesses push up prices quickly when costs rise, but cut them slowly or late after costs fall. It seems to happen for <a href="https://www.sciencedirect.com/science/article/abs/pii/S0140988323002074">petrol</a> and <a href="https://www.sciencedirect.com/science/article/abs/pii/S105905601730240X">mortgage rates</a>, and the Fels inquiry was presented with evidence suggesting it happens in supermarkets. Brendan O’Keeffe from NSW Farmers told the inquiry wholesale lamb prices had been falling for six months before six Woolworths announced a cut in the prices of lamb it was selling as a “<a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">Christmas gift</a>”. <h2>2. Punishment for loyal customers</h2> A <a href="https://theconversation.com/simple-fixes-could-help-save-australian-consumers-from-up-to-3-6-billion-in-loyalty-taxes-119978">loyalty tax</a> is what happens when a business imposes higher charges on customers who have been with it for a long time, on the assumption that they won’t move. The Australian Securities and Investments Commission has alleged a big <a href="https://theconversation.com/how-qantas-might-have-done-all-australians-a-favour-by-making-refunds-so-hard-to-get-213346">insurer</a> does it, setting premiums not only on the basis of risk, but also on the basis of what a computer model tells them about the likelihood of each customer tolerating a price hike. The insurer disputes the claim. It’s often done by offering discounts or new products to new customers and leaving existing customers on old or discontinued products. It happens a lot in the <a href="https://www.finder.com.au/utilities-loyalty-costing-australians-billions-2024">electricity industry</a>. The plans look good at first, and then less good as providers bank on customers not making the effort to shop around. Loyalty taxes appear to be less common among mobile phone providers. Australian laws make it easy to switch <a href="https://www.reviews.org/au/mobile/how-to-switch-mobile-carriers-and-keep-your-number/">and keep your number</a>. <h2>3. Loyalty schemes that provide little value</h2> Fels says loyalty schemes can be a “low-cost means of retaining and exploiting consumers by providing them with low-value rewards of dubious benefit”. Their purpose is to lock in (or at least bias) customers to choices already made. Examples include airline frequent flyer points, cafe cards that give you your tenth coffee free, and supermarket points programs. The purpose is to lock in (or at least bias) consumers to products already chosen. The <a href="https://www.accc.gov.au/consumers/advertising-and-promotions/customer-loyalty-schemes">Australian Competition and Consumer Commission</a> has found many require users to spend a lot of money or time to earn enough points for a reward. Others allow points to expire or rules to change without notice or offer rewards that are not worth the effort to redeem. They also enable businesses to collect data on spending habits, preferences, locations, and personal information that can be used to construct customer profiles that allow them to target advertising and offers and high prices to some customers and not others. <h2>4. Drip pricing that hides true costs</h2> The Competition and Consumer Commission describes <a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">drip pricing</a> as “when a price is advertised at the beginning of an online purchase, but then extra fees and charges (such as booking and service fees) are gradually added during the purchase process”. The extras can add up quickly and make final bills much higher than expected. Airlines are among the best-known users of the strategy. They often offer initially attractive base fares, but then add charges for baggage, seat selection, in-flight meals and other extras. <h2>5. Confusion pricing</h2> Related to drip pricing is <a href="https://www.x-mol.net/paper/article/1402386414932836352">confusion pricing</a> where a provider offers a range of plans, discounts and fees so complex they are overwhelming. Financial products like insurance have convoluted fee structures, as do electricity providers. Supermarkets do it by bombarding shoppers with “specials” and “sales”. When prices change frequently and without notice, it adds to the confusion. <h2>6. Algorithmic pricing</h2> <a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">Algorithmic pricing</a> is the practice of using algorithms to set prices automatically taking into account competitor responses, which is something akin to computers talking to each other. When computers get together in this way they can <a href="https://www.x-mol.net/paper/article/1402386414932836352">act as it they are colluding</a> even if the humans involved in running the businesses never talk to each other. It can act even more this way when multiple competitors use the same third-party pricing algorithm, effectively allowing a single company to influence prices. <h2>7. Price discrimination</h2> Price discrimination involves charging different customers different prices for the same product, setting each price in accordance with how much each customer is prepared to pay. Banks do it when they offer better rates to customers likely to leave them, electricity companies do it when they offer better prices for business customers than households, and medical specialists do it when they offer vastly different prices for the same service to consumers with different incomes. It is made easier by digital technology and data collection. While it can make prices lower for some customers, it can make prices much more expensive to customers in a hurry or in urgent need of something. <h2>8. Excuse-flation</h2> <a href="https://www.bloomberg.com/news/articles/2023-03-09/how-excuseflation-is-keeping-prices-and-corporate-profits-high">Excuse-flation</a> is where general inflation provides “cover” for businesses to raise prices without justification, blaming nothing other than general inflation. It means that in times of general high inflation businesses can increase their prices even if their costs haven’t increased by as much. On Thursday Reserve Bank Governor <a href="https://www.afr.com/policy/economy/inflation-is-cover-for-pricing-gouging-rba-boss-says-20240215-p5f58d">Michele Bullock</a> seemed to confirm that she though some firms were doing this saying that when inflation had been brought back to the Bank’s target, it would be "much more difficult, I think, for firms to use high inflation as cover for this sort of putting up their prices." <h2>A political solution is needed</h2> Ultimately, our own vigilance won’t be enough. We will need political help. The government’s recently announced <a href="https://treasury.gov.au/review/competition-review-2023">competition review</a> might be a step in this direction. The legislative changes should police business practices and prioritise fairness. Only then can we create a marketplace where ethics and competition align, ensuring both business prosperity and consumer wellbeing. This isn’t just about economics, it’s about building a fairer, more sustainable Australia.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223310/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/david-tuffley-13731">David Tuffley</a>, Senior Lecturer in Applied Ethics & CyberSecurity, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-prices-are-so-high-8-ways-retail-pricing-algorithms-gouge-consumers-223310">original article</a>.

Money & Banking

Retailer pulls "creepy" and "disturbing" ad for school uniforms

H&M has removed a school uniform ad in Australia after social media users slammed the retailer for sexualising children. The ad, which a few social media users have screenshot before it was removed, features two young girls in school uniform looking back at the camera with the caption: "Make those heads turn in H&M's Back to School fashion." Users on X, formerly known as Twitter, slammed the ad calling it it "creepy" and "disturbing", and sharing their own stories about "being ogled" at school. "What is your intention with this sponsored Facebook ad?" Australian writer Melinda Tankard Reist, whose work addresses sexualization and the harms of pornography, shared on X. "Little schoolgirls generally don't want to 'turn heads.' The large numbers I engage with in schools want to be left alone to learn and have fun and not draw unwanted attention to their appearance." "The little girls parents generally prefer heads don't 'turn' when others see their daughters walking to school, on a bus or in class," she continued. "Why would you want to fuel the idea that little girls should draw attention to their looks, bodies and 'style'?" <blockquote class="twitter-tweet"> <a href="https://twitter.com/hm?ref_src=twsrc%5Etfw">@hm</a> <a href="https://twitter.com/hmaustralia?ref_src=twsrc%5Etfw">@hmaustralia</a> what is your intention with this sponsored Facebook ad? Little schoolgirls generally don’t want to “turn heads”. The large numbers I engage with in schools want to be left alone to learn and have fun and not draw unwanted attention to their appearance 1/ <a href="https://t.co/DDwv42GeNz">pic.twitter.com/DDwv42GeNz</a> — Melinda TankardReist (@MelTankardReist) <a href="https://twitter.com/MelTankardReist/status/1747866459836158415?ref_src=twsrc%5Etfw">January 18, 2024</a></blockquote> Another user wrote: "This is really disturbing. "I remember being cat called whilst waiting for the bus in my school uniform. It made me feel unsafe." "Girls go to school to get an education, not to be jeered at by onlookers," they concluded. The Swedish fashion giant has since removed the ad and apologised for the campaign. "We have removed this ad," they told CNN. "We are deeply sorry for the offence this has caused and we are looking into how we present campaigns going forward." Images: Getty

Legal

Senior wins $38,000 a year for life because of retailer's mistake

A man in the US is set for life after a retailer's blunder led him to win the lotto. Michael Sopejstal, 60, who lives in Illinois, won the Lucky for Life lotto after a retailer at a GoLo gas station accidentally printed a ticket with 10 lines for a single draw. Buying the Lucky for Life ticket has been part of Sopejstal's routine, as he travels from Illinois to Michigan every few weeks to eat at his favourite restaurant, and this time he got lucky. “I checked my ticket one morning and saw that I had won $US25,000 ($A38,000) a year for life,” he told Michigan Lottery officials. “I immediately started thinking about all the things I could do with the money and whether I wanted to take the lump sum or annuity option. “It was an amazing feeling!” Sopejstal chances of winning were one in more than 1.8 million. According to the lottery, Sopejstal recently visited their headquarters to claim his prize. They said he opted for a lump sum payment of $US390,000 ($A590,000) instead of the annual payment. Sopejstal also told them that he plans to use his prize money to travel and save whatever is left. Images: Getty

Money & Banking

Kmart and Target join forces to create mega discount stores

Two of Australia’s favourite retail giants are about to get better in a huge merger creating a $10 billion discount giant. Wesfarmers is set to fold Target into Kmart with hopes that it will improve sales, provide better value for customers, and allow both stores to share backend technology. Ian Bailey the Managing Director of Kmart Group has said that there will be “no impact” to stores, and that the move was an "internal reorganisation". "With customers now demanding value more than ever, this new operating model will unlock a new level of scale and productivity across both brands, so we can deliver even greater value to our customers in the future," he said in a statement. "For store networks and 50,000 store team members – it's business as usual – as we continue to focus on providing the best value products to the thousands of customers in Australia and New Zealand who choose to shop at Kmart or Target every day." The move comes as the cost of living crisis is forcing more and more Aussies to be mindful of their spending habits. In a statement to the The Australian Financial Review, Bailey said that there would likely be “a handful of redundancies" but more jobs overall by next year. He added that one of the benefits of tighter integration and better technology is the ease in which the prices of products can be reduced. He said that the price drop on 1000 Kmart products this month was assisted by merchandise planning tools and a self-navigating inventory scanning robot. "Kmart and Target are both strong businesses. I don't see us doing this from a position of weakness. It's quite the opposite,” he told the publication. “I'd say we're strong, but I think there's an opportunity to really capitalise on this time and find ways to continue to deliver better value for customers." "What we found was that running two businesses it was very, very difficult to get the tech into Target, and to get those benefits. This is really why we decided to push the two businesses into one." Images: Getty

Money & Banking

Electricity retailer tells customers to leave

A small electricity retailer has told its customers to leave and find another company as they expect their prices to soar. Victorian energy supplier Electricityinabox expects its prices to increase by a whopping 95 per cent on July 1. CEO Morgan Duncan sent out a letter to all customers telling them that "only the lazy or crazy would stay" with the company. The letter begins with a straightforward statement telling customers “you need to find a new electricity provider today". "You need to be aware that smaller low price high value retailers are exiting this market. Four have already exited, some of them closed their doors," it continues. The company will continue to provide certain services but is expected to leave the electricity sector due to the increasing demand making it expensive. Energy companies ReAmped, LPE, Discover, Elysian and Future X have told customers to look elsewhere, while Momentum, Simply, Mojo, CovAU and Nectr have stopped accepting new customers. The news comes just a week after Australian Energy Market Operator (AEMO) called on Aussies to reduce their electricity consumption. Australian Energy Regulator (AER) and Australian Competition and Consumer Commission (ACCC) have warned retailers not to take advantage of the situation. Image: Shutterstock

Money & Banking

Retailers criticised for ‘outrageous’ markups on rapid COVID tests amidst shortage

Retailers across Australia have been criticised by consumers for marking up the prices of rapid antigen tests for COVID-19, amidst increasing case numbers and a national shortage of tests. Many people around the country are struggling to find any tests at all, which is where services like <a rel="noopener" href="https://findarat.com.au/" target="_blank">Find A RAT</a> come in, helping people share information about stores that have stock, although there are only 149 listings of stores with RATs in stock, compared to 2271 listings of stores that are sold out. Of those stores that do have RATs in stock, many are charging desperate consumers an exorbitant amount for the necessary at-home testing kits. Australians have taken to social media to name and shame retailers that are charging sky-high prices for the tests, including Channel 9 reporter Airlie Walsh, who said that a BP service station in Edgecliff, in Sydney’s eastern suburbs, was selling individual tests for $30 each. She added, “They’re as little as $1 – $2 in Europe, but for a family of four in Oz, you’ll pay $120.” Journalist Eliza Barr was finally able to acquire some tests for $19.99 each, marked up from $12.25 to $13.75 and typically sold as a pack of 20. <blockquote class="twitter-tweet"> The most cursory Google reveals these Innoscreen tests are meant to come in a box of 20 and can cost as little as between $12.25 and $13.75 per test in Australia. This is absolutely unforgivable. <a href="https://t.co/72eih9FOOZ">pic.twitter.com/72eih9FOOZ</a> — Eliza Barr (@ElizaJBarr) <a href="https://twitter.com/ElizaJBarr/status/1478198750401073153?ref_src=twsrc%5Etfw">January 4, 2022</a></blockquote> While online retailer Kogan is now out of stock, as are Chemist Warehouse, Amazon and Harvey Norman, screenshots show that at one point, it was selling individual tests for $44 each. Beauty and health journalist Eleanor Pendleton took to Instagram to criticise the markups, explaining that in November, she purchased over 100 RATs for a production shoot, costing $1200. She wrote, “What cost me $1200 two months ago would today cost $4000! “With PCR tests only available to those with symptoms, the price gouging on RATs is disgusting.” The markups come as Prime Minister Scott Morrison held firm to his government’s decision not to make RATs free, despite individual state governments such as Queensland and Victoria purchasing supplies themselves in order to provide them for free to residents. The price gouging also comes as the need for RATs increases, as governments urge citizens not to line up for PCRs unless they are symptomatic. On Tuesday afternoon, the Australian Competition and Consumer Commission announced that it was on the case. Rod Sims, chairman of the ACCC, said it was monitoring the situation “very closely”, explaining, “If we get a number of reports about excessive pricing from particular outlets, that’s when we can get involved and take whatever we judge to be the appropriate action. We’re gathering information as fast as we can.” Image: Massimiliano Finzi

News

I chose the electricity retailer offering the best deal for my home. That’s not what I got

Households in most of Australia have been able to choose between electricity retailers for more than a decade. The main reason is to <a rel="noopener" href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage" target="_blank">reduce their bills</a>. But past research by the <a rel="noopener" href="https://www.vepc.org.au/" target="_blank">Victoria Energy Policy Centre</a> (at Victoria University) has found only marginal benefits in switching retailers. Our study of more than 48,000 bills from Victorian households in 2018, for example, found households typically saved <a rel="noopener" href="https://theconversation.com/victorians-who-switched-energy-retailers-only-save-45-a-year-leaving-hundreds-on-the-table-122786" target="_blank">less than A$50 a year</a> by switching energy providers. Has anything improved since then? A few weeks ago I decided to test the market for my own household supply. To guide my choice, I evaluated 357 competing offers from 30 retailers using my half-hourly consumption and solar export data for the last year. The 357 offers came from the Victorian government’s price comparison <a rel="noopener" href="https://compare.energy.vic.gov.au/" target="_blank">website</a>, the only comprehensive source of all commonly available offers. After having found the deal I wanted, it was a painless and quick online process to switch to the new retailer. Two weeks later I checked what had actually happened. I discovered my new retailer had not switched me to its cheapest offer, but to one of its most expensive. I estimate I’ll still save about $143 for the year. But I would have saved about $100 more if the company had put me on its cheapest advertised offer (which, after all, was the reason I chose this retailer). These numbers might not be large, but I have a small bill because I have solar panels and consume much less electricity than typical customers. For the typical customer, the differences would be bigger. I have asked my new retailer to explain, but am yet to receive a reply. How I worked out my (lack of) savings My electricity bill has several elements: a daily charge, two consumption rates and a solar feed-in rate. You might note such elements in the offer you choose and then compare them to the offer the retailer actually puts you on. But you’d need to be highly motivated with time on your hands to do so. To do my sums I used special software to scrape and price all competing offers. This software, developed over several years and used in our previous research, is not publicly available. The outcome of my test is broadly consistent with the findings of our previously mentioned research. That analysis – <a rel="noopener" href="https://link.springer.com/article/10.1007%2Fs11149-020-09418-9" target="_blank">using more than 48,000 bills</a> voluntarily uploaded to the Victorian government’s price comparison website in 2018 – found typical households could theoretically save A$281 a year, or about 20% of their bill, by switching to the best possible advertised deal. In reality, however, customers who switched retailers saved only A$45 a year – or about 3% of their annual bill. <img src="https://images.theconversation.com/files/431880/original/file-20211115-13-1wdrcv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="Child using light switch" /> In theory customers who switch electricity retailers should be able cut their annual bill by 20%. In reality it turns out to be about 3%. Image: Shutterstock I cannot be sure my recent experience is typical. But I think it likely other switchers will have had a similar experience. My study of the 357 competing offers available to me suggests many retailers seem to use “bait and switch” – or “tease and squeeze” – marketing strategies to attract new customers. What should be made of this? Choice can be valuable. Competition can lead to innovations – such as solar and battery packages with zero upfront payment that are now appearing in the the market. But the benefit of reforms making it easier to choose and switch between electricity retailers are not being fully realised. The more complex the market becomes as electricity generation is progressively decentralised and electricity buyers also become sellers, the harder it becomes to assess the merits of the complicated offers from energy retailers. Or even to know if what you signed up for is what you are actually getting. Had I known my new retailer would not switch me to its best offer (the one that attracted me in the first place), I wouldn’t have switched. This underlines the need for governments and regulators to look at how the market is working in practice, not just in theory. Examples of this approach are the 2017 independent review of Victoria’s electricity and gas retail markets <a rel="noopener" href="https://www.energy.vic.gov.au/about-energy/policy-and-strategy" target="_blank">chaired by former deputy premier John Thwaites</a> and the Australian Competition and Consumer Commission’s <a rel="noopener" href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage" target="_blank">2018 inquiry into electricity affordability</a>. But these are exceptions. The devil lies in the detail of how customers search for better offers and then switch to retailers in pursuit of those better offers. Regulations to clean up possibly misleading advertising and “sharp” business practices should flow from that.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/171676/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a rel="noopener" href="https://theconversation.com/profiles/bruce-mountain-141253" target="_blank">Bruce Mountain</a>, Director, Victoria Energy Policy Centre, <a rel="noopener" href="https://theconversation.com/institutions/victoria-university-1175" target="_blank">Victoria University</a> This article is republished from <a rel="noopener" href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a rel="noopener" href="https://theconversation.com/i-chose-the-electricity-retailer-offering-the-best-deal-for-my-home-thats-not-what-i-got-171676" target="_blank">original article</a>. Image: Getty Images

Money & Banking

The Block winners Mitch and Mark unveil new project

Mitch and Mark may have just won The Block, but they’re not interested in taking time off to savour their success (and their $744,444.44 winnings) - they’re already on to their next project, and it has a very tight turnaround! As part of their plan to expand their Mitch and Mark Home online store into a bricks and mortar store, the pair are hard at work setting up a pop-up shop in Newport on Sydney’s Northern Beaches that they plan to open up in just one week. In a video posted to Instagram, Mitch announced the project, explaining all the work they need to get done before they can open the store in one and a half week’s time. "I'm here outside what's going to be Mitch and Mark Home as of one and a half week's time. <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/tv/CWnXadtL-2r/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/tv/CWnXadtL-2r/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by Mitch and Mark (@mitchandmark)</a> </div> </blockquote> “We're tearing through fitting the shop out, we've got a lease, we've got it all secured. We've got all the stock that's being entered into data — Mark's doing that at home — but I'm here with Glen who's building frames for a change room." Mitch said that it feels like they’re on The Block all over again, with the caption to the video reading, "The race is on, day 2 & just over a week to build the @mitchandmarkhome shop to showcase our homewares, let alone set up all the infrastructure & display our homewares range - it's a @theblock week all over again!!!" The store is set to open by December 1, and will be an extension of the homewares range they already have, selling their candle and home fragrance ranges, their linen range, and a line of shirts designed by Mitch. Image: Don Arnold/WireImage

Real Estate

I chose the electricity retailer offering the best deal for my home. That’s not what I got

Households in most of Australia have been able to choose between electricity retailers for more than a decade. The main reason is to <a href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage">reduce their bills</a>. But past research by the <a href="https://www.vepc.org.au/">Victoria Energy Policy Centre</a> (at Victoria University) has found only marginal benefits in switching retailers. Our study of more than 48,000 bills from Victorian households in 2018, for example, found households typically saved <a href="https://theconversation.com/victorians-who-switched-energy-retailers-only-save-45-a-year-leaving-hundreds-on-the-table-122786">less than A$50 a year</a> by switching energy providers. Has anything improved since then? A few weeks ago I decided to test the market for my own household supply. To guide my choice, I evaluated 357 competing offers from 30 retailers using my half-hourly consumption and solar export data for the last year. The 357 offers came from the Victorian government’s price comparison <a href="https://compare.energy.vic.gov.au/">website</a>, the only comprehensive source of all commonly available offers. After having found the deal I wanted, it was a painless and quick online process to switch to the new retailer. Two weeks later I checked what had actually happened. I discovered my new retailer had not switched me to its cheapest offer, but to one of its most expensive. I estimate I’ll still save about $143 for the year. But I would have saved about $100 more if the company had put me on its cheapest advertised offer (which, after all, was the reason I chose this retailer). These numbers might not be large, but I have a small bill because I have solar panels and consume much less electricity than typical customers. For the typical customer, the differences would be bigger. I have asked my new retailer to explain, but am yet to receive a reply. <h2>How I worked out my (lack of) savings</h2> My electricity bill has several elements: a daily charge, two consumption rates and a solar feed-in rate. You might note such elements in the offer you choose and then compare them to the offer the retailer actually puts you on. But you’d need to be highly motivated with time on your hands to do so. To do my sums I used special software to scrape and price all competing offers. This software, developed over several years and used in our previous research, is not publicly available. The outcome of my test is broadly consistent with the findings of our previously mentioned research. That analysis – <a href="https://link.springer.com/article/10.1007%2Fs11149-020-09418-9">using more than 48,000 bills</a> voluntarily uploaded to the Victorian government’s price comparison website in 2018 – found typical households could theoretically save A$281 a year, or about 20% of their bill, by switching to the best possible advertised deal. In reality, however, customers who switched retailers saved only A$45 a year – or about 3% of their annual bill. <img src="https://images.theconversation.com/files/431880/original/file-20211115-13-1wdrcv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="Child using light switch" /> In theory customers who switch electricity retailers should be able cut their annual bill by 20%. In reality it turns out to be about 3%. Shutterstock I cannot be sure my recent experience is typical. But I think it likely other switchers will have had a similar experience. My study of the 357 competing offers available to me suggests many retailers seem to use “bait and switch” – or “tease and squeeze” – marketing strategies to attract new customers. <h2>What should be made of this?</h2> Choice can be valuable. Competition can lead to innovations – such as solar and battery packages with zero upfront payment that are now appearing in the the market. But the benefit of reforms making it easier to choose and switch between electricity retailers are not being fully realised. The more complex the market becomes as electricity generation is progressively decentralised and electricity buyers also become sellers, the harder it becomes to assess the merits of the complicated offers from energy retailers. Or even to know if what you signed up for is what you are actually getting. Had I known my new retailer would not switch me to its best offer (the one that attracted me in the first place), I wouldn’t have switched. This underlines the need for governments and regulators to look at how the market is working in practice, not just in theory. Examples of this approach are the 2017 independent review of Victoria’s electricity and gas retail markets <a href="https://www.energy.vic.gov.au/about-energy/policy-and-strategy">chaired by former deputy premier John Thwaites</a> and the Australian Competition and Consumer Commission’s <a href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage">2018 inquiry into electricity affordability</a>. But these are exceptions. The devil lies in the detail of how customers search for better offers and then switch to retailers in pursuit of those better offers. Regulations to clean up possibly misleading advertising and “sharp” business practices should flow from that.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/171676/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/bruce-mountain-141253">Bruce Mountain</a>, Director, Victoria Energy Policy Centre, <a href="https://theconversation.com/institutions/victoria-university-1175">Victoria University</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/i-chose-the-electricity-retailer-offering-the-best-deal-for-my-home-thats-not-what-i-got-171676">original article</a>. Image: Shutterstock

Retirement Income

Huge list of Bunnings stores set to reopen

Bunnings will open its doors to customers across Greater Sydney from Monday the 6th of September 2021, excluding those stores located in local government areas of concern. This decision follows NSW hitting the 70% first dose vaccination target, reducing the risks associated with reopening a retail space. This move will provide Sydney residents with access to essential products benefiting emergency home repairs and general maintenance. “The Safety of our team and customers has been at the core of everything we do, and we continue to follow government guidance in all the states and territories where we operate” says managing director Mike Schneider. The vaccination roll out has increased opportunities for both our team and customers to get vaccinated and has given us every confidence to re-open stores in Greater Sydney. COVID-safe protocols will apply and will include a one per 10-metre density limit. <img style="width: 500px; height: 281.25px;" src="https://oversixtydev.blob.core.windows.net/media/7843672/new-project.jpg" alt="" data-udi="umb://media/fad5c5a6faaf4d8d9e4ce0aea0b3a17b" /> Image: Getty Customers are still encouraged to utilise contactless Drive & Collect and delivery for non-essential items, this keeps up with current public health guidance. Stores were closed in August after restrictions around retail stores of concern tightened. Schneider said it would be “easier for our team to manage” if all stores were closed. Stores located in council areas of concern remain open for contactless collection in line with government orders. These areas which amount to almost half of Sydney’s population include Bayside, Blacktown, Burwood, Canterbury-Bankstown, Campbelltown, Cumberland, Fairfield, George’s River, Liverpool, Parramatta, Strathfield, and some areas of Penrith. The following Bunnings locations will reopen to retail customers: <ul> <li>Alexandria</li> <li>Artarmon</li> <li>Ashfield</li> <li>Balgowlah</li> <li>Belrose</li> <li>Caringbah</li> <li>Carlingford</li> <li>Castle Hill</li> <li>Chatswood</li> <li>Dural</li> <li>Gladesville</li> <li>Gordon</li> <li>Gregory Hills</li> <li>Kirrawee</li> <li>McGraths Hill</li> <li>Narellan</li> <li>Narrabeen</li> <li>North Penrith</li> <li>Penrith</li> <li>Randwick</li> <li>Rose Bay</li> <li>Rouse Hill</li> <li>Thornleigh</li> <li>Warringah Mall</li> </ul>

News

The Aussie businesses offering a vaccine incentive you won't be able to turn down

A group of Aussie businesses are planning a unique way to encourage people to get vaccinated against COVID-19. Josh Landis, CEO of Clubs NSW, is backing nation-wide vaccine incentives and is planning to offer free beers to customers who are fully jabbed, once NSW is out of lockdown. Most of Landis' clubs are currently closed due to the Greater Sydney lockdown, and he says the incentive works for both Australians and for his business. "If you're one of those people who gets vaccinated, you've done the right thing, gotten a couple of jabs for Australia, then we want to reward you," he told A Current Affair. <img style="width: 500px; height: 280.44871794871796px;" src="https://oversixtydev.blob.core.windows.net/media/7842861/aca-screenshot.png" alt="" data-udi="umb://media/dff6d57c53f74ef5a37c2c0404edb1aa" /> He also plans to work with other businesses around the country to have similar incentives offered to those in other states. Paul Zahra from the Australian Retailers Association said he would like to see other Australian retailers do their part to boost the amount of jabs in arms. "We now have three states in lockdown, we can't continue to survive like this the actual economic cost is building," he said. Shops such as Bunnings could soon become vaccination hubs, and he said other businesses are ready to offer incentives once more vaccines are available to the public. The incentive program has been inspired by the US, who have been offering food, alcohol, million dollar lotteries and even college scholarships to those who are fully vaccinated. Paul Zahra went on to say, "Here in Australia the airlines have actually announced free frequent flyer points so we know incentives work and we're watching this space very closely." Image credits: Getty Images

Caring

Why retail workers are wearing a second badge

Since the start of the pandemic, retail workers have been at the forefront of people’s frustrations as they copped abuse on the daily. In April, one woman was filmed racially abusing workers at a Telstra store in Sydney, telling a staff member to “go back to China, while this week another customer berated retailers over their face mask policies, saying such views “have no basis in science or fact”. In a bid to curb the rise of abuse, particularly during COVID, staff at some of Australia’s biggest chains will now wear a second name badge. Employees at stores such as Woolworths, Target, Big W and KFC will have a tag on their uniform stating either “I’m a mother”, “I’m a father”, “I’m a son” or “I’m a daughter” to remind customers they are someone’s family member. A Woolworths employee recently went viral on TikTok after she explained the importance of the badge. “A lot of people have been asking on my videos what this says and it says ‘No one deserves a serve, I’m a daughter’,” Dakota Rae Shaw said in the video. “Basically the union brought them out to us so that people could imagine if it was their daughter they were speaking to.” <img style="width: 323.727px; height: 500px; display: block; margin-left: auto; margin-right: auto;" src="https://oversixtydev.blob.core.windows.net/media/7837116/screen-shot-2020-07-29-at-30527-pm.png" alt="" data-udi="umb://media/e6d21d25f98e44dd8f805dd04bf6cbd9" /> According to the union, over 85 per cent of workers are being abused while they work. SDA NSW secretary Bernie Smith said there has been a reported 44 per cent reduction in customer aggression since the badges were rolled out. “The idea of the badges is to humanise the person behind the counter, so the customer sees them as a person rather than somebody processing their sale,” he told Yahoo. “They’re someone who’s part of a family and part of a community, and the badges make people think twice.” A Facebook user recently shared her experience of a staff member wearing a badge saying “I’m a son” at Woolworths store at Lennox Head, on the northern NSW coast, on Saturday. “He was wearing a second badge … I started asking questions as to why, and he said it was an attempt stop the abuse that they cop,” she wrote. “He said he hasn’t experienced it in Lennox yet but in Byron Bay he did all the time because of (in his words) ‘the sense of entitlement most people there had’. “It breaks my heart that young people just trying to do their job, especially during a pandemic, have to put up with this c**p. “If you witness it, call it out. Not ok.”

Travel Trouble

Fast fashion: how retailers can use pandemic to change our terrible relationship with clothes

Even before the pandemic, the UK fashion retail industry <a href="https://www.bbc.co.uk/news/business-43240996">was struggling</a>. John Lewis, M&S and Debenhams had all announced losses, job cuts and store closures, while House of Fraser was taken over. Since lockdown, Oasis and Warehouse <a href="https://www.bbc.co.uk/news/business-52285231">have entered administration</a>, and John Lewis <a href="https://www.theweek.co.uk/106801/will-john-lewis-close-some-stores-permanently">has said</a> that not all its stores will reopen. <a href="https://www.bbc.co.uk/news/business-43240996">One of the challenges</a> for these retailers is cut throat price competition from international rivals like Primark and H&M, and online retailers like Pretty Little Thing and Misguided. <a href="https://researchonline.gcu.ac.uk/en/publications/doing-it-for-the-kids-the-role-of-sustainability-in-family-consum">Low-price garments</a> became all the more attractive to consumers after their spending power was weakened by the financial crisis of 2007-09. This brought about the era of fast fashion – low quality clothes needing replaced more quickly, and consumers who see them as disposable. The price of these garments doesn’t reflect their true cost. It ignores both the workers who make them and the <a href="https://www.theguardian.com/fashion/2020/apr/07/fast-fashion-speeding-toward-environmental-disaster-report-warns">carbon footprint</a> from more production, more transportation and more landfill. Rays of hope At the turn of the year, there <a href="https://www.theguardian.com/fashion/2020/jan/01/fashion-climate-sustainability-greta-thunberg-i-d-gucci-zero-emissions-carbon-neutral">was a feeling</a> that sustainability might be moving back up the agenda. A surge of consumer protests, led by Extinction Rebellion and Greta Thunberg, seemed to herald a public desire for change. To <a href="https://www.ecowatch.com/fast-fashion-is-the-second-dirtiest-industry-in-the-world-next-to-big--1882083445.html">raise awareness</a> that fashion is the second-worst polluter after oil, Extinction Rebellion <a href="https://www.vogue.com/slideshow/extinction-rebellion-london-fashion-week-climate-change-protests">held a funeral</a> during London Fashion Week 2019. It seemed possible that consumers might be galvanised to shop more sustainably – especially given the extreme weather conditions of 2019, and fears that there are <a href="https://www.independent.co.uk/environment/climate-change-un-report-greenhouse-gases-carbon-dioxide-methane-sea-level-rise-global-warming-a8646426.html">just ten years left</a> to halt the irreversible consequences of climate change. Then came the pandemic. With many high street shops forced to suspend trading, the whole industry has been in flux. Brands like Primark and Matalan have <a href="https://www.theguardian.com/fashion/2020/mar/27/put-earth-first-can-a-greener-fairer-fashion-industry-emerge-from-crisis">cancelled or suspended</a> orders in places like Bangladesh, causing some factories <a href="https://www.theguardian.com/global-development/2020/apr/02/fashion-brands-cancellations-of-24bn-orders-catastrophic-for-bangladesh">to close</a>. There may have been <a href="https://www.bbc.com/future/article/20200422-how-has-coronavirus-helped-the-environment">big environmental benefits</a> from the world at a standstill, but it will be little consolation to garment workers who are furloughed or jobless. Yet amidst <a href="https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/beyond-coronavirus-the-path-to-the-next-normal">all this upheaval</a>, there is <a href="https://www.theguardian.com/fashion/2020/mar/27/put-earth-first-can-a-greener-fairer-fashion-industry-emerge-from-crisis">an opportunity</a> for the fashion industry – both to help these workers and more broadly to put sustainability at the heart of their business. The decisions by fashion retailers like <a href="https://www.theindustry.fashion/burberry-retools-factory-to-make-non-surgical-gowns-and-masks-and-funds-vaccine-research/">Burberry</a> and <a href="https://edition.cnn.com/style/article/fashion-industry-masks-protective-equipment-covid-19/index.html">Prada</a> to divert into making medical gowns and masks for healthcare workers are a good starting point. If companies can make positive changes to help manage coronavirus, they can also address fast fashion. If, for example, companies paid garment workers the <a href="https://labourbehindthelabel.org/our-work/faqs/#1441884831979-53ad6cf0-86251441886042060">living wage</a> for their part of the world, they could use it in their marketing to garner a competitive advantage. Paying a living wage <a href="https://thefableists.wordpress.com/2014/04/03/tailored-wages-new-report-investigates-clothing-brands-work-on-living-wages/">doesn’t significantly increase</a> the cost of garments. Take the example of a T-shirt with a retail price of £29, for which the worker receives 0.6% or 18p. If that was doubled to 36p, it would not increase the overall price by very much. Paying a living wage <a href="https://labourbehindthelabel.org/our-work/faqs/#1441884831979-53ad6cf0-86251441886042060">should enable workers</a> in developing countries to afford nutritious food, clean water, shelter, clothes, education, healthcare and transport, while leaving some left over. One fashion entrepreneur that has developed a different way of helping garment workers during the pandemic is Edinburgh-based Cally Russell. He set up the <a href="https://www.theguardian.com/fashion/2020/may/30/lost-stock-its-like-buying-your-future-self-a-present">Lost Stock initiative</a>, which sells the garments from orders cancelled by UK fashion retailers by purchasing garments directly from manufacturers in Bangladesh. <a href="https://loststock.com/pages/costs">A Lost Stock box</a> of clothes costs £39. Almost a third is donated to the Sajida Foundation, which is giving food and hygiene parcels to Bangladeshis struggling during the pandemic. For maximum transparency, Lost Stock also provides a price breakdown that outlines the costs to the manufacturer, the charity and the initiative itself. Cool to care Another tactic that fashion marketers could use is to encourage in consumers a similar cool-to-care ethos to that brought out by the pandemic – as seen with the UK’s weekly clapping for key workers, for example. Business in numerous sectors are already focusing their marketing message on supporting NHS workers to capitalise on this spirit of collective solidarity. Fashion marketers could channel people’s desire for self-gratification towards buying clothes that contribute to the social good. My <a href="https://www.emerald.com/insight/content/doi/10.1108/QMR-09-2019-0113/full/html">research illustrates</a> the discomfort consumers experience when aware of allegations of both garment-worker and environmental exploitation, so it should be possible for marketers to benefit from doing the reverse. <a href="https://www.toms.com/">TOMS (Tomorrow’s Shoes)</a> is an example of a fashion business with giving at the core of its strategy: for every pair of shoes sold, a pair is donated to a child in need. Since 2006, 100 million pairs of shoes have been donated, and TOMS <a href="https://www.toms.com/about-toms">has since branched</a> into areas like eyewear.Another example is <a href="https://snagtights.com/pages/our-philosophy#:%7E:text=Sustainable,first%20fully%20bio%2Ddegradable%20tights.">Snag Tights</a>, which is supporting NHS frontline workers with a free pair of tights for every order placed. The company markets its tights as vegan friendly and free of plastic packaging, and is trying to develop the world’s first fully bio-degradable tights. Swaps and seconds One other trend that should definitely be encouraged is initiatives that expand the lifecycle of fashion and textiles. <a href="https://www.stylus.com/hmzhcg">London Fashion Week hosted</a> a fashion swap shop in February for the first time. Similarly, the flagship Selfridges store on London’s Oxford Street <a href="https://www.retail-week.com/fashion/selfridges-opens-second-hand-clothing-boutique/7033360.article?authent=1">began selling</a> second-hand luxury fashion and high-end brands with resale site Vestiaire Collective in 2019. There has also <a href="https://www.theguardian.com/fashion/2018/dec/22/fashion-libraries-ethical-clothing-borrowing">been a rise</a> in fashion libraries that rent fashion garments and accessories, allowing consumers affordable access to higher quality and luxury items. Fashion retailers could move in this direction, while also supporting customers by hosting workshops for upcycling garments into something new. In sum, the fashion industry should take advantage of the pandemic pause and the current mood to show constructive leadership to the global economy. It should use its power to help change our relationship with clothing into something more equal and sustainable for the long term. Written by Elaine Ritch. Republished with permission of <a href="https://theconversation.com/fast-fashion-how-retailers-can-use-pandemic-to-change-our-terrible-relationship-with-clothes-140210">The Conversation.</a>

Beauty & Style

ALDI shoppers furious after retailer cancels its annual snow gear sale

It’s an event that shoppers look forward to each year, as they rush to their nearest ALDI for the annual Snow Gear Special Buys sale. The highly anticipated sale has people “working in teams” as they attempt to score a bargain. But unfortunately, the German retailer has had to cancel the snow sale for 2020, forcing shoppers to put that excitement on hold till 2021. Once a year, the supermarket releases items such as jackets, goggles, boots and thermal wear, helping Aussies stay warm as they hit the slopes. But with the coronavirus pandemic stopping people from travelling, the retailer found that it was inappropriate to continue with the sale. Taking to Facebook, ALDI revealed they are shifting their priorities to the grocery sector, forcing them to make the difficult decision of withdrawing its 2020 Snow Gear Special Buys event. “We’ll be back with our best-ever collection next year,” the post read. “We’re looking forward to sharing our best-ever collection with you in 2021. Apologies for any inconvenience caused.” The post garnered over 1000 comments and shares, but people were torn over the decision. Majority of comments came from those who live in colder areas, saying they rely on the sale to stock up on winter clothing. “Pity about the people who live in the colder areas. I was waiting for this to stock up on clothes to work in the paddocks etc. Typical that they only think people who will go on holidays buy this stuff,” one person commented. “Considering not everyone travels to snowy regions; there are thousands of people who actually live in these areas,” added another. “Winter is still coming – would be great if they still brought out the thermals, boots, gloves, & beanies.” In normal circumstances, the sale occurs each year in May and attracts thousands of shoppers around the country as they hope to snap up a cool saving on snow gear.

Domestic Travel

Coronavirus: Harvey Norman retail mogul boasts sales increase

Retail mogul and Harvey Norman co-founder Gerry Harvey has dismissed concerns over the new coronavirus outbreak in Australia, describing the pandemic as an “opportunity” that has spiked up sales. As the federal government moved to <a href="https://www.abc.net.au/news/2020-03-22/coronavirus-australia-live-updates-covid-19-latest-news-lockdown/12078506">close entertainment venues, gyms and places of worship indefinitely</a> to slow the spread of coronavirus, Harvey said he is “not really scared” about getting infected despite being 80 years old. Speaking on 60 Minutes alongside health experts and other business leaders, Harvey said, “It’s not the Spanish Flu that killed 15 million people just after the First World War. Why are we so scared about getting this virus?” <blockquote class="twitter-tweet"> Billionaire retailer Gerry Harvey reckons we should all ‘lighten up’ and not let coronavirus dictate our lives. For a section of the population, “she’ll be right” is the default position, the question is whether that mentality puts ourselves and others at greater risk. <a href="https://twitter.com/hashtag/60Mins?src=hash&ref_src=twsrc%5Etfw">#60Mins</a> <a href="https://t.co/Q6zApNN934">pic.twitter.com/Q6zApNN934</a> — 60 Minutes Australia (@60Mins) <a href="https://twitter.com/60Mins/status/1241677290280345601?ref_src=twsrc%5Etfw">March 22, 2020</a></blockquote> He added, “I’ve got to 80 years of age, I’ve had a wonderful life and I think to myself, I’m just going to keep going as if nothing’s happened.” Older people and those with underlying illnesses are most at risk of serious infection. A study from the Chinese Centre for Disease Control and Prevention showed that the death rate of coronavirus patients aged above 80 was <a href="https://www.businessinsider.com.au/coronavirus-death-age-older-people-higher-risk-2020-2">15 per cent</a>, compared with 0.2 per cent for those under 50. The businessman said the pandemic has propelled consumer demand and boosted revenue across his national chain of electronics stores. “You know, this is an opportunity,” he said. “Our sales are up in Harvey Norman in Australia by nine per cent on last year. Our sales in freezers are up 300 per cent. And what about air purifiers? Up 100 per cent.”

Money & Banking

Harris Scarfe saved from collapse as Spotlight acquires retail icon

Australian discount department store Harris Scarfe has been rescued from receivership after fabric and home fittings store Spotlight agreed to buy the 170-year-old business. The future of the retailer’s 44 stores and about 1,300 staff is yet to be determined as Spotlight and receivers at Deloitte continue discussing the details of the transaction. According to the <a href="https://www.smh.com.au/business/companies/spotlight-set-to-save-harris-scarfe-from-collapse-20200303-p546bm.html">Sydney Morning Herald</a>, the settlement could be finalised by <a href="https://www.smh.com.au/business/companies/spotlight-set-to-save-harris-scarfe-from-collapse-20200303-p546bm.html">mid-April</a>. “There is still a lot of work we need to do together to finalise the transaction and we will be working with the Spotlight Group and the Harris Scarfe leadership team to make this happen,” said Vaughan Strawbridge, partner at Deloitte Restructuring Services. “We are hopeful all of the 44 stores will be retained under the sale but ultimately, this will be dependent on how the transaction progresses over the next couple of weeks.” The retail chain <a href="https://www.oversixty.com.au/finance/retirement-income/harris-scarfe-to-close-21-stores-across-australia">fell into receivership in December</a> and closed down 21 stores in early January as receivers at Deloitte sought a buyer. Harris Scarfe is one of the <a href="https://www.smartcompany.com.au/industries/retail/gerry-harvey-retailers-collapse/">many brands which have collapsed in recent months</a>, with Ishka, Colette by Colette Hayman, Jeanswest, Curious Planet and Bardot entering voluntary administration.

Retirement Income

BIG W begins massive cull of 30 stores across Australia

Auburn, Chullora and Fairfield will be the first three Big W stores of a massive 30 store cull to be shut down within the coming months. As the retailer attempts to turn around a stunning $85 million loss at the hands of their savage competitors, Kmart and H&M, 90 staff in each store will be getting the ruthless end of the stick. The closure process will put a $370 million dent in the company’s profit, and yet after a solid 10 months since announcing the “store review”, Big W’s owner, Woolworths Group, have yet to announce the remaining 27 branches that are yet to close. Big W bigwigs insist the once mighty retailer still has a future and some trimming of the store network will help “to accelerate the path to profitability”. The three doomed Sydney-based Big W stores will bring their shutters down for the final time on January 31. A Big W spokeswoman told <a rel="noopener noreferrer" href="https://over60.monday.com/boards/63889387/pulses/news.com.au" target="_blank">news.com.au</a> it acknowledged “closing any store isn’t easy on our teams and communities”. “The purpose of Big W’s store review, announced in April last year, is to build a strong, profitable and more sustainable store and distribution centre network that reflects our customers’ needs and the rapidly changing retail environment,” she said. The spokeswoman said staff have been offered redeployment to other stories or Woolworths supermarkets. Last year, Woolworths Group CEO Brad Banducci said there was “no alternative” but to shut down a number of their stores. However, he stressed that closing the chain altogether was not on the cards. Despite the major shutdown impending on Big W, there are positive signs for the retailer. Its $85 million full-year loss in 2019 was an improvement on the $110 million loss in the previous year. Sales were also up 4.2 per cent last year helped by clothing, online and click and collect. “The closure of 16 per cent of the Big W network is unlikely to be the end of the store rationalisation profile,” the 2019 note said. “Big W can confirm we are on track with our turnaround,” the store’s spokeswoman said.

Money & Banking

Australian jewellery store open since Queen Victoria's reign forced to close its doors

It’s been around since Queen Victoria was the British monarch, but its reign as a long-serving, respected family business in Tasmania’s north-west is coming to an end. Originally named E A Joyce and Son, now known as Joyce Jewellers is preparing to close its doors for the last time after being in continuous operation since 1893. Current owner Jennifer Macartney said the downfall of the jewellery shop is due to a number of reasons, with the main being online shopping. “People used to come into town just for shopping or an experience,” she said. “They would come in on a regular basis … they’d look over all the stores and make their purchases. “But now people seem to have a fixed idea of what they want when they come into town and buy it and go home again.” Mrs Macartney is a fourth-generation member of the Joyce family, and inherited the business from her parents. She has fond memories of running through the store as a child. Mrs Macartney, who is the great-granddaughter of founder Edward Joyce, took over the business in the ‘90s when the store had a team of 10 staff members and business was booming. But as time went on, the store couldn’t keep up with the world’s advancements. “The economic climate is not good at the moment and the outlook is not good unfortunately,” she said. “I like to be optimistic, but it’s very difficult under these circumstances. “People are not coming into town to shop as much as they used to.” The store has a large fan base, with many taking to Facebook to voice their grievances over the closure. “Sad to hear this. I have shopped there for years. In fact, still have the paperwork of authenticity for my engagement ring 48 years ago!” wrote Christine Winskill. Debbie Cocks said: “Joyce’s Jewellers one of the very last of old school Burnie names and icons, so sad.” “Wow how sad. I got my ears pierced there in 1978,” said Carol O’Neill. Joyce Jewellers will close its doors on December 10.

Domestic Travel

Brace yourself! Retailers face fines of up to $50,000 as new plastic bag ban starts

Victorian retailers who supply single-use plastic bags to customers could be fined $49,500 per offence under new state laws that come into effect from tomorrow. The plastic bag ban impacts retail outlets in the entire state, which includes supermarkets, fashion stores, fast-food outlets, convenience stores as well as individual businesses who face fines of $9,900 per offence. The new law makes it illegal for any retailer to “lightweight plastic shopping bags with handles with a thickness of 35 microns or less at any part of the bag, including degradable, biodegradable and compostable bags,” according to <a rel="noopener" href="https://www.news.com.au/finance/business/retail/retailers-face-fines-of-50000-as-victorias-plastic-bag-ban-kicks-in-on-november-1/news-story/db6e33ffdd5c8768ab75ec31afc9ae8e" target="_blank">news.com.au</a>. <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/B3avG2YHhoO/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <a style="color: #000; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none; word-wrap: break-word;" rel="noopener" href="https://www.instagram.com/p/B3avG2YHhoO/?utm_source=ig_embed&utm_campaign=loading" target="_blank">👍 Don't forget your reusable bag @vicmarket #reusablebags #VICbagban #melbourne #retail #shopping #plasticbagban #national_retail_association</a> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;">A post shared by <a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px;" rel="noopener" href="https://www.instagram.com/vicbagban/?utm_source=ig_embed&utm_campaign=loading" target="_blank"> VIC bag ban</a> (@vicbagban) on Oct 9, 2019 at 5:34pm PDT </div> </blockquote> In a statement that announced the legislation to parliament, Victorian Environment Minister Lily D’Ambrosio said that the ban is a much-needed step towards protecting the state’s nature from plastic pollution. “Plastic pollution is a significant environmental problem — the actions we take now will help ensure Victoria has a clean and bright future,” Ms D’Ambrosio said. “The feedback on this one was clear. Victorians want to do more to protect the environment from the damage litter causes and are overwhelmingly supportive of banning single-use plastic shopping bags. “We’ve been working closely with businesses to plan for the ban ahead of November and we’ll continue to look at ways we can reduce other types of plastic pollution across Victoria.” The National Retail Association has partnered with the Victorian Government to educate business owners about the ban. They said that thousands of businesses have made the switch to sustainable bags. “Overwhelmingly retailers are embracing this policy,” NRA chief executive Dominique Lamb said in a statement. “We know that consumers are very supportive, and most businesses have already moved to implement more sustainable options well ahead of Friday’s deadline.”

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Aussies are spending less on coffee and clothes despite tax cuts

Aussies are spending less on clothes, shoes and coffee, as retail turnover stalled despite the government’s tax cuts. According to data by the Australian Bureau of Statistics, sales fell over the month of July for two thirds of the industries across six of the eight states and territories. Spending on clothing, footwear and accessories fell by 1 per cent. Other non-essential purchases also took a hit – cafes, restaurants and takeaway services dipped 0.6 per cent while department stores were down 0.2 per cent. The whole retail sector sunk by 0.1 per cent nationwide despite the government’s tax cut package giving out up to $1,080 per person. Figures by the Federal Chamber of Automotive Industries also revealed that new car sales slumped 10.1 per cent in August compared to the same month in the previous year. While discretionary spending declined, essential goods such as food and household products grew by 0.3 per cent and 0.1 per cent respectively in the same month. July saw spending dip in Queensland (-0.2 per cent), New South Wales (-0.1 per cent), South Australia (-0.5 per cent), Victoria (-0.1 per cent), the Australian Capital Territory (-0.5 per cent), and Tasmania (-0.1 per cent). On the other hand, Western Australia (0.6 per cent), and the Northern Territory (0.3 per cent) increased. National Retail Association (NRA) CEO Dominique Lamb said the numbers “are not good news” for retailers and the economy. “A drop in turnover shows that consumer confidence remains stubbornly low, despite measures such as the personal tax cuts and reduction in interest rates,” Lamb said. “Retail is one of the largest sectors in Australia and the biggest employer of young people, so it’s importance to the overall economy cannot be overstated.” The NRA said Aussie shoppers should “not shy away” from supporting their local retail outlets. In July, Treasurer Josh Frydenberg said he expected the tax refunds to encourage 10 million people to spend in shops, and thus give a <a href="https://www.afr.com/policy/economy/tax-cuts-will-boost-spending-frydenberg-20190709-p525fj">boost to the weak economy</a>. Last week, the economy was revealed to be at its weakest in a decade as growth fell to 1.44 per cent over the past financial year. Frydenberg said the numbers showed the “<a href="https://www.smh.com.au/politics/federal/spending-growth-in-nsw-hits-zero-as-australia-s-economy-slumps-to-gfc-levels-20190904-p52o3e.html">remarkable resilience</a>” of the Australian economy amid the sluggish global outlook. “I want to emphasise that Germany, the United Kingdom, Sweden, Singapore and others experienced negative growth in the June quarter,” he said. However, shadow treasurer Jim Chalmers said, “If the Treasurer thinks that these weak economic growth numbers are good, then he’s even more out of touch than we feared.”

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Brace yourself! Retailers face fines of up to $50,000 as new plastic bag ban starts

Aussies are spending less on coffee and clothes despite tax cuts

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