Footwear retailer says retail conditions worst in 30 years, expert says retail landlords bracing for more empty stores

Are we really in the worst retail trading conditions in 30 years?

So says RCG Corporation, the company behind the footwear franchise, Athlete’s Foot.

Reporting a 1.2% quarterly profit fall but tipping a flat first-half profit, RCG chairman chairman Ivan Hammerschlag told shareholders yesterday that trading conditions were the worst he’d seen in three decades.

It’s worth noting that footwear has been particularly hard hit – according to the Australian Bureau of Statistics, footwear and other personal accessory retailing fell by 1.3% in trend terms in September.

Still, David Gordon, partner in charge of the national retail advisory practice at WHK Group, says RCG is not alone in feeling blue about the state of the sector.

As he sees it, there’s a huge discrepancy between the retailers that are doing well, and those that are suffering.

And good retailers – ones who know their stuff and run a good business – are telling him they’ve had enough.

Worryingly, Gordon says leasing executives are saying that there’s never been a better time to negotiate with landlords – suggesting that many landlords are expecting a tough Christmas and empty stores in the new year.

“There’s a feeling that there’s a buyers’ market out there,” Gordon says.

So with this in mind, and keeping note of all the VIP nights being offered to buyers that are in effect just another invitation to discounted stores, SmartCompany has a few tips for retailers to make the festive season more profitable.

Don’t rely on discounting

Yes, we’ve now had years of discounting and consumers are resistant to paying full price. But as Gordon explains it, discounts should occur when a retailer is short of sales and trying to get rid of stock.

If you can, go full price while people have an incentive to spend, because chances are you’ll need do discount later on.

Seek out your loyal customers

Gordon says retailers should be looking to their loyal shoppers and contacting them via their VIP or loyalty club.

“Talk to them directly, do micro-marketing,” he suggests. It’s easier to sell to an existing market than find another.

Check your basics

Are you uniquely positioned? Do you have the right products at the right prices? Once you get people in the store, is your customer service and upselling up to scratch?