Tom Elliot, the CIO of Beaulah Capital, said of Gerry Harvey after he appeared on yet another ABC media show: “If Gerry Harvey ever wants another job, I’m sure he doesn’t, he should be a union representative working for the Australian car unions because they make exactly the same argument why the Federal Government should pump in $250 million to support the production of, you know, Commodores here in Australia”.He added “It’s same argument and I’m amazed that he’s making it. I don’t think he cares about jobs for one moment”
Harvey who earlier in the week was accused of not getting it when it came to modern day retailing told an ABC Lateline presenter that “I get It. I know I get it”. He said that he was assured that he “got it” because he asks his own staff whether “he got it”.
ABC presenter Alan Kohler described Gerry Harvey as being seen as the great dinosaur who has getting “positively foam flecked with fury” about the impact of internet sales on employment.
Harvey told Kohler “1.3 million people are employed in retail in Australia. If you sack 200,000 of those people, that will be at least 5-, 6-, 700,000 people that will lose their job. Can’t people see that?”
“So we’ll lose 100,000 jobs in retail and we will pick up 200,000 in distribution, net loss 98,000 people. That’s how big it is. I’m telling you, that’s how big it is. It’s a real worry going forward”
Ed Prendergast, fund manager at Pengana Capital said “I think rent is another major issue. The landlords, I mean my theory is we just have too many shops. We had a golden era of sort of 10 years of increased expenditure and there’s a delay when people see that and then plan a roll out of shops and shopping centres”
“Now we’re paying, or the retailers are paying the price. Their rent increases are well and truly above CPI so to actually keep their profits standing still they need to grow sales and clearly the sales line is falling.”
“Your only other two costs as a retailer are power, which is rising at sort of 10 per cent and labour which as Jo highlighted, you’ve got rising awards.”
Pendergast said that the potential safety valves for the retailers over the next two or three years is if the currency falls. He said retailers are suffering deflation which means they have to sell more units to make the same sales. If the currency goes the other way perversely that could be a positive for them and a change of government which would potentially lower the labour costs and the last thing is the actual landlords potentially realising that they’ve pushed rents too hard”.