9 Dec 2011 - Consumer goods king Gerry Harvey says 20 per cent of retail jobs could be lost if tough trading conditions continue.
The Harvey Norman co-founder and chairman predicts that the sector, which employs 1.2 million people, could shrink to one million workers next year due to the parlous state of retailing.
"We employ 1.2 million people and next year we'll be employing one million - it's getting bad every day and just gets worse," Mr Harvey told AAP on Friday.Mr Harvey said traditional store-front retailers were increasingly losing out to online sales, with shopper dollars flying offshore.
"Now it's starting to bite because so many retailers are going out of business.
"And then you've got so many Harvey Norman shops that are in serious trouble.
"We're losing money in more shops than we've ever lost money and that's (the same for) every retailer right across the country."
Australians are keeping purse strings tight and hoarding savings as global economic woes weigh on sentiment, and retailers are feeling the pinch.
Losing sales to online stores is a double whammy.
PayPal Australia this week said online commerce in the nation had grown at 11 per cent over the past year and sales were expected to be $30 billion by the end of calendar 2011.
Harvey Norman last month launched an online shop, following its Harvey Norman Big Buys website that started in April, after feeling the effect of internet shopping on its traditional stores.
Harvey Norman reported a 3.8 per cent fall in global sales in the September quarter, compared to the prior period.
The franchise was doing it tough in the lead-up to the all-important Christmas season, and it was not alone, Mr Harvey said.
The retailer expected "a reasonable Christmas, but not great".
Mr Harvey also renewed his call for the introduction of the GST and duties on foreign goods bought online for less than $1,000.
Currently, imported goods must be valued at more than $1,000 to attract such levies.
Mr Harvey said the existing system didn't appear to be enforced because the retailer had tested it by buying a $1,500 item online and was not charged GST and duties.
"They put $1,500 on your credit card and send you an invoice for $990 so it goes through customs, and the credit card company doesn't say anything because it's good for them, too.
"This has been going on for ages."
A Productivity Commission report on Friday recognised that competition from overseas online sellers was a challenge to the retail sector.
However, the commission said the low value threshold for exemption from GST and duty on imports was only a "minor part" of the competitive disadvantage traditional retailers faced and it would cost more to lower it than retain it.
According to the commission, the retail sector is worth around $60 billion a year to the economy.source: www.businessspectator.com.au
