Gerry Harvey says there’s no incentive to open new stores, but Topshop founder wants nine more

Two of the heavyweights of global retail have declared the retail sector to be at a “turning point”, with Harvey Norman chair Gerry Harvey saying retail is being dwarfed by the might of the resources sector and Topshop founder Philip Green saying the days when “every retailer could sell a million white T-shirts” are over.

But their views on and plans for Australia are vastly different: Green has just opened a Topshop store in Australia and nine more are tipped to follow, whereas Harvey says he will chase growth overseas, particularly in Malaysia.

Harvey says for the first time in its 30-year history, the electronics and white goods retailer won’t open a major new store in Australia this year.

“It’s got to the stage where there’s no incentive to open a major new store in Australia. None,” Harvey told the Australian Financial Review.

“Some will survive, some won’t,” Harvey is quoted saying. “The whole Australian economy is running on resources. The rest – retail, tourism, media – we’re all struggling.”

By contrast, fast-fashion giant Topshop is tipped to open 10 stores altogether across the country, following on from its new Melbourne store and a Sydney store planned for the second half of 2012.

“Now you’ve got to be quicker, faster, newer, as opposed to the lazy buying of the past – that’s ended. We’ve all got to work a lot harder,” Green told the Weekend Financial Review.

“In the past every retailer could sell a million white T-shirts. That’s all gone. People want to have a reason to buy – the game’s changed,” he added.

But Lisa Tartaglia of the Australian Centre for Retail Studies is not so sure that retail is at a critical point, saying some retail groups are soaring while others struggle.

“I wouldn’t expect expansion to be happening here because I don’t think their [Harvey Norman’s] sales have been through the roof,” Tartaglia says.

“But Masters [the Woolworths hardware chain] is expanding rapidly, and for clothes, the international brands are coming to Australia and I think there’s room for that.”

She says retailers this year need to focus on getting traffic in their stores, improving loyalty schemes, and ensuring they have a good online sales channel.

“Consumers are getting quite demanding. It’s so easy for a consumer to look on their mobile and see a product is being sold elsewhere.”

She says loyalty cards are often underused by retailers.

“They are perfect in understanding customers. A little reward that brings people into their stores – something as simple as a $5 voucher – can help.”

According to Green, Topshop opened here partly because demand for its product online was impressive – even without advertising.

“It surprised us how strong it’s been. There’s definitely demand down there.”