One Common Myth All Retailers Face That Keeps Them Struggling With Underperformance And Anxiety

Retail businesses have always prospered or disappeared based on customers perception of value


If you’re a retailer and you took as true the latest headlines you could be excused for succumbing to a full blown panic attack.

  • “Australian retail sales flatline” – Business Insider, November 3.
  • “…department store figures go backwards is of high concern to the sector,” says ARA’s executive director Russell Zimmerman. October 5
  • Retail sales “a shocker”, Commonwealth Bank senior economist Gareth Aird
  • “Australian retail sales missed expectations again”, Customs Today, November 3


Many retailers offer the following justifications for what’s happening.

  • Wage growth remains stuck at record lows.
  • Mortgage stress at highest levels.
  • The impact of online shopping

The common thread among these explanations is that they remove personal responsibility and lay the blame at something over which owners have no control. While this thinking may make some feel better in the short term, is it helpful?

It’s true that all these conditions are happening now however, what’s especially relevant is that similar headlines have been written many times in the past.

The myth that these headlines would have us conclude is that the Australian retail sector is in crisis, yet many businesses manage to outperform their competitors and transcend expectations regardless of the state of the economy.

Capital Economics Chief Economist Paul Dales, speaking to Business Insider said:

today’s result was reflective of the retail industry’s recent struggles, as retailers’ attempts to attract customers by cutting prices failed to produce higher sales volumes”.

Cutting prices is the traditional “go to” move many retailers use.

Discounting – when done correctly – works for attracting a larger amount of foot traffic to your store and getting rid of out-of-season or old inventory.

However, many retailers overuse and poorly execute this pricing strategy. As a result they lose profit, and they lose trust, and earn reputation of being a bargain retailer. Consequently many shoppers become deterred from purchasing products at regular prices again. 

So, what’s really going on in the marketplace?

A walk through any mall or shopping precinct is illuminating. Regardless of category, it’s true, some businesses are quiet. Most noteworthy however is that others in the same category are booming.

If the retail sector is in dire straits, how can that be?

What are these high performers doing right?


Discouraging retail headlines; fact or fiction?


Wise business owners base their decision making on facts, therefore let’s take a look at some of these.

 Consumers are spending their money.

For example, according to “Eating out in Australia 2017”, there are just over 24 million Australians, and they eat out an average of two to three times a week. That’s more than 50 million meals out each week, or 2.5 billion in a year. Each Australian household spends an average of $94 a week eating out. That’s a total of $45 billion a year!

According to the ABS, in 2016 Australians spent just over $300 billion on retail goods and activities like food and clothing and spending at cafes and restaurants.

In trend terms, Australian turnover rose 2.0% in September 2017 compared with September 2016.

Crunch the numbers and you’ll find that on average, each Australian in 2017 will spend over $12,500 in retail goods and activities.

What consumers are not doing is spending their money evenly among retailers.

Retailers must earn consumers’ dollars.

There’s nothing new in that.

Furthermore, businesses have always prospered or disappeared based on the value they offer as judged by customers.

Today, customers are more educated than ever before, consequently they expect more from retailers.


Because it’s their money, and it’s therefore their right to spend how they choose.

Why are some retail businesses missing out?


First of all, while consumers’ tastes have changed, many retailers continue to dish up the same tired old menu of products and services.

In addition, service delivery – let alone service excellence- is in many cases nonexistent.

Some businesses have little if any idea what is their ideal demographic. Consequently they cast as wide net as possible and  therefore end up appealing to no one in particular.

Also, many expect quick fixes in critical areas like recruitment, service delivery and sales training rather than investing in long term re-education and training.

The ingredients of retail success.


Because you want to grow in market share and profit, you need to use your resources for maximum effectiveness.

For example, it makes no sense investing in advertising if:

Your competitors also need the same customers.

The good news for you is that right now many are behaving like an ostrich. They keep their head buried in the sand, and hence don’t know how their customers really feel about them. Instead, they blame people and circumstances over which they have no control for their lack of results. They try a few things haphazardly, and expect instant results. Also, they don’t put in consistent long term effort to improve in key areas of profitability. Since they keep doing everything the same old way, there’s no wonder why their customers just won’t seem to respond to them in the way they’d like.

All of this presents a tremendous opportunity for smart operators, but the clock is ticking and your opportunity may already be running out. Now is the right time to strike at your lazy competitor’s market share.  For some of your opposition, change just seems all too difficult. The result is that instead of changing tactics, they secretly hope that customers will come around to their way of thinking. You don’t have to look far to see who are these unwilling to change operators. They are the ones with empty premises.  They are the ones for whom the “Going out of business Sale” time is fast approaching. In an environment of epic customer dissatisfaction, strategic improvements in key areas will make a profound difference to your business’s profitability.

Why would you want to miss out?


In conclusion, your big opportunity is waiting for you now, but maybe it won’t be around for long. Businesses too lazy to change, or too stubborn to ask for help or who don’t care about their customers and employees will disappear and be replaced.

 Now is the time for bold leadership to take charge and announce that they don’t just want to survive, they want to thrive. Leadership that will inspire their staff, not only with a bold vision of a thriving business, but also with a commitment to the work it takes to listen to and give their customers exactly what they want.  Don’t buy into the myth the headlines are trying to sell. Smart redirection of your resources and abilities, together with a long term investment of time and effort can see your retail business earn a greater share of the over $300 billion dollars on offer.


List of references:

  1. Customs Today. 2017. “ Australian Retail Sales Fall Flat.” [ONLINE] Available at: [Accessed 1 November 2017].
  2. Power Retail/Prinitha Govender. 2017. “August 2017 Retail Trade Figures.” [ONLINE] Available at: [Accessed 27 October 2017].
  3. Economic Insights/CommSec. 2017. “Aussies spend up on clothes, take-away food.” [ONLINE] Available at: [Accessed 2 November 2017].
  4. ABC News/ Michael Janda. 2017. Retail sales slump dashes hopes for quick Australian economic rebound. [ONLINE] Available at: [Accessed 12 October 2017].
  5. Business Insider/Sam Jacobs. 2017. “Australian Retail Sales Flatline.” [ONLINE] Available at: [Accessed 6 November 2017].
  6. 2017. 8501.0 – Retail Trade, Australia, Sep 2017. [ONLINE] Available at: [Accessed 7 November 2017].
  7. Intermedia Group Pty Ltd. 2017. “Eating Out In Australia 2017.” [ONLINE] Available at: [Accessed 7 November 2017].
Leon Skaliotis

Leon Skaliotis is Founder and Principal Advisor of Retail Fundamentals. With over 30 years experience in specialty retail, hospitality, financial, franchising and advertising industries services, Leon has gathered, learned and distilled the best ideas, practice, systems, techniques, strategies and success principles that have made average businesses great, and struggling business owners realize good health, wealth and prosperity.
Together with his own knowledge and experience, Leon can draw on the expertise of many partners, (each an expert in their own field), to consult business owners and advise on ways to grow revenue through building, analysing, and improving customer experience programs, supplier relationships, financial advice, exit strategies, staff acquisition and retention, and internal and external marketing strategies.

Leon Skaliotis
M: 0425 833 344

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