Experience
Consumer Services
Australia’s relative smaller population means the retail market is dominated by a number of large players. This has also resulted in a lack of diversity of brands products and services.
To achieve the necessary growth the economies of scale for most retailers is more than 36 stores to provide the benefits of centralised head office and buying while maintaining store profitability.
Covid has changed the way consumers buy goods and services, ecommerce is now a distinct part of our retail environment, while the move to greater workplace flexibility will change retail in our cities.
Key Challenges
- All retailers have suffered the impact of price increases and uncertainty of supply created by the increased costs of shipping and availability of containers.
- Digital marketing through Instagram and TikTok has allowed designers and product creators to communicate directly to consumers by passing bricks and motor retailers allowing them to trial new products without committing to large orders.
- The difficulty facing traditional retail networks is how to deal with the residual lease deferments held on their balance sheet, while continuing to right-size their networks both in terms of number of stores and location, to cater to the reduction in foot traffic in the major cities.
Our experience
While we have seen a return to brick-and-mortar retailing over 2022 it has not returned to the same level, with e-commerce operators retaining some but not al of the gains they made over the pandemic.
We are however entering an uncertain economic with rising interest rates and falling consumer confidence. It isn’t clear that the increase in consumer spending over Black, Cyber and Xmas 2022 period was the result on increased consumer confidence or the increase in prices through inflation.
What is clear is that spending patterns have altered, e-commerce has a stronger position and the store network footprints that existed pre-covid focussing on City centres has moved suburban meaning that retailers need to re-think their store networks and address the accrued covid lease liabilities.
Olvera is the financial training partner for the Australian Fashion Council designing and running the training courses for young designers.
Olvera is one of Australia’s leading advisors to the retail industry for structured voluntary administrations to reduce corporate overheads and store foot networks to sustainable levels.
Case Studies
Our case studies only include publicly identified clients.
