I’ve been travelling to England for almost 25 years, and I can tell you it’s official. For the first time in my life Australia is now more expensive than Britain – and most other places in the world. Why? Have we become expensive or has the rest of the world simply become cheaper?
Retail in Australia, like much of the world, seems to be suffering greatly at the moment. Wherever I look I see “Sale, Sale, Sale”, “50% off everything in store!” and “Closing Down”. And I’m not even a shopper.
The Global Financial Crisis (amusingly it’s simply known as the “Financial Crisis” outside Australia) has caused shoppers in many countries to cut back, tighten their belts, and make do, but the GFC hasn’t hit Australia to the same extent, so why is our retail sector tanking so badly?
The answer is simple – a “smart” consumer revolt caused by greater buying power.
When the Australian dollar trades above 80 US cents, this is considered “high” in Australian financial terms. Its the point where economists sit up, markets take notice, and consumers start to buy up on imported goods.
Australian retail and their dictator-like landlords don’t tend to reduce their prices when the dollar surges – although they certainly are lightning quick to increase them when the dollar drops – citing a range of factors, most plausible being the cost/effort of continuous price adjustment with a typically fluctuating currency, and the fact that much imported stock has been purchased by the retailer many months previously, often at a higher price.
Short-term, reasonable excuses, to be sure, but the Australian dollar has been above 80 US cents for almost 2 years now, and achieved parity on October 16th 2010 – almost a year ago.
So by these retailers own argument, a price adjustment on all imported goods should have filtered down by now. It hasn’t, and consumers are turning to online solutions (and shopping trips) to satisfy their material needs overseas at a greatly reduced price.
In the meantime, the tortoise that is Australian Retail is simultaneously closing stores, shedding jobs and squeaking loudly for Government assistance. Let’s face it, the salad-eating days are over, and I for one am struggling to find sympathy.
Here are some very recent examples of some non-sale prices overseas:
- Hong Kong – 30 Min taxi ride to city – $30 (Melbourne $60)
- England – Black leather men’s Camper boots – $175 (Myer Australia $350)
- Finland – Heineken beer bottle in city cafe – $5 (Australia $8)
- USA – Quality restaurant two course meal + drinks for two in a major city – $80 (Melbourne $130)
- France – Can of Coke – $1 (Australia $2)
- Russia – 2011 model Pentium laptop $600 (Australia $2000)
- Canada – 1 litre of petrol in city – $1.18 (Melbourne $1.40)
No need for me to ask you to “be the judge” – you and millions of others have already voted with your feet (and mouse). Something’s got to give and a government intervention or stimulus package won’t do it.
Retail employees had better join the revolution, they’re going to need the savings.