What goes ’round comes ’round

Australian manufacturing has been decimated over the last few decades, and whilst there is no single reason for this impact, the determination of the major retailers to use the opening of global sourcing options to reduce their costs and compete on price has been a major contributor.

In my patch, the food industry, a whole layer of mid sized Australian owned food manufacturers have simply gone broke, or sold out to multinationals consolidating manufacturing internationally, as FMCG retailers increasingly sourced overseas. The very few that are left are fighting a rear guard action, and will probably lose.

Therefore, when I hear retailers bleating about the competition from international retailers selling into Australia using the same tools the retailers have used on former Australian suppliers, I think “good one” The latest bleating culminating in an advertising campaign, and lots of appearances by Gerry Harvey amongst others, does nothing but encourage me to believe that the short sighted retail sourcing policies which are just about landed price, with no acceptance of the long term benefits of having a vibrant and innovative manufacturing sector are coming back to bite them on the arse.

Retailers have been dishing it out for years, thumbing their noses at any form of regulation of retail, ignoring the potential and growth of e-tail, it is illuminating to see how they are reacting to some of their medicine coming back to them, although the sales loss is currently only very small, and the consumers they want slugged with GST for online purchases are also their customers, unlikely to thank them for the GST led cost increase.

Get over it, and figure out how to compete on other than shelf price, meanwhile, a few of us are enjoying the sight of retailers squirming.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
This entry was posted in Change, Customers, Personal Rant, Sales, Small business and tagged , , , , , , , , , . Bookmark the permalink.

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