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Message from the CEO – 24 July

July 24, 2018

One thing retailers do exceptionally well is create jobs for hundreds of thousands of Australians – many of whom are in the youth category.

Around one quarter of all employed young people are in the retail sector. These jobs help supplement their schooling or tertiary education, gear up for overseas adventures, save up for home deposits and countless other future endeavours.

It’s one of the most common ‘first jobs’ for Australia’s young people – something I know most of you would take great pride in.

But we still struggle with youth unemployment rates across the nation – particularly in regional areas where the local economy may not be as strong as it is in other metro areas.

News out this week however, has revealed that over the last financial year, Australia has achieved the best youth unemployment rate since 1988/89 – almost thirty years in fact –  and as the Treasurer pointed out, the year Taylor Swift was born!

We know that our industry has played a role in bolstering youth employment, but the news doesn’t stop there.

A jobs boom in New South Wales and Queensland has helped drive unemployment overall to its equal lowest point in six years, and 2017/18 has just proven to be the strongest year for jobs growth since 2004/5 – after the creation of 339,000 more jobs.

It is important to note that full-time positions have actually decreased, while part-time positions have increased – and while there are plenty of arguments about the desire Australians have for full-time work, the retail sector tends to attract a great many of those who desire the flexibility it offers, to balance against their other commitments.

While a myriad of factors influenced this momentum, this period also coincides with the partial implementation of reductions to Sunday penalty rates in the retail and hospitality industries.

While the penalty rate reductions have now come into full effect as of July 1, these same rate reductions have been almost fully counter-balanced by the 3.5 per cent increase in the minimum wage that came into effect on the same day, meaning the actual reduction works out to be only around $16 per eight hour shift.

Despite this, it’s a move that continues to provoke intense debate when it comes to its effect on the overall employment figures as well as overall consumer spending – however there are far more factors at play when it comes to the flow of discretionary spend in Australia’s retail industry.

David Jones has this week blamed the extremely challenging conditions we’re all facing for its declining sales. Owner, South African department store chain Woolworths’ Holdings, has warned that annual profits could fall by as much as 20 per cent, as the chain struggles with trading conditions here and in its home market.

As we know, these conditions have far more to do with where and how consumers are parting with their discretionary spend, rather than the amount itself, as consumers are simply looking for different purchases, sourcing channels and overall experiences from what they have favoured in the past.

This of course equates to a much greater amount of money flowing out of the domestic industry and into other channels – but you can’t have it both ways! Retailers simply cannot pay exorbitant wages, huge rents, monstrous compliance costs, excessive insurances and other overheads, and be expected to create jobs for Australians if they don’t have the turnover to support these things. It’s Business 101!

This is why we are constantly advocating on your behalf to the powers-that-be, to ensure that your voice is heard on these issues.

We have to work together to secure better trading conditions to remain competitive, so that the hundreds of thousands of small to medium businesses out there are able to continue doing their bit when it comes to unlocking more jobs and more shifts for Australian workers. 

Join the Conversation!

If you would like to share with us how the reduction in penalty rates has affected your capacity to offer more shifts to staff, we’d love to hear from you!

You can share your stories with us via [email protected] or on Facebook, Twitter or LinkedIn

 


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