The Sumo Salad Syndrome.

There is no doubt that resentment felt toward the ‘negotiation’ of retail lease renewals by tenants has been on simmer for a long period of time. But the hotplate has just been turned up to eleven by the latest salvo fired off from Sumo Salad in its ongoing battle with Westfield’s leasing department. The tactic of using protection under voluntary administration provisions to reduce costs – in this case leasing obligations – has been used in the past but not so much as an offensive weapon. An offensive weapon that many other tenants may also consider using as a viable way of changing the conversation.

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Over Inflated Valuations Are Holding Us Back.

The push to align Australian accounting standards to recently introduced changes requiring leasing liabilities to be declared as liabilities on the balance sheet has many commentators mumbling about ‘technical insolvencies’ and ‘bank covenant failures’ leading to widespread industry defaults and disastrous outcomes. From most of the people I have spoken to privately in the banking world this alignment to international standards will have little to no affect for their loan books.

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Get Out of The Way And Let The Renaissance Begin.

The pace of retail failures in Australia appears to have picked up of late and there are increasing whispers around the market of countless retail businesses (covering hundreds of retail stores) that are privately ‘on the market for sale’ – many with unreal expectations of their worth. Still others are very publicly waiting for the right time to either trade sell or sell by public offering. This is a huge demonstration of a watershed moment in Australian retail.

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Bunnings Early UK Struggles Are Just The Beginning.

Recent announcements have indicated that Bunnings is struggling with the introduction of its brand and business model into the United Kingdom retail market. Some have taken those announcements as an opportunity to criticise and in the worst cases, call for the premature abandonment of the expansion plans. They point to similar criticism of Woolworths’ disastrous Masters play which they claim they called as a failure from day one – a claim I for one dispute both in the timing of the call and that Masters was destined to be a failure. It was not.

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Retail Reality Is About To Bite.

There is an enormous amount of hype and propaganda surrounding e-commerce. But all the noise can’t mask the numbers. In the United States – according to the U.S. Commerce Department – online sales now represent 8.1% of all retail sales and last year online sales grew at 14.63% compared to all retail sales growth of 3.3% and US$5.5 trillion in total sales. Amazon alone represented more than 50% of the growth in online sales and their growth rate last year was 25.2% on revenue of US$90 billion. Sounds impressive. Until you compare it to….surprise, surprise – Walmart.

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Why Are Retail Analysts & Media Commentators So Damn Negative?

This week retail analysts and media commentators hit an all time high on the stupidity meter when they claimed a “retail recession” is upon us. When oh when are these idiots going to understand that retail doesn’t work month-to-month it works year on year. The pure economic definition of a recession doesn’t hold up when applied to retail sales numbers. According to ABS data March 2017 is 2.5% better than March 2016. Look it up. This has been the trend consistently now for about a year.

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