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Australian Economy in Cardiac Arrest: Solomon Lew calls for urgent 50 basis point interest rate cut; Retail magnate Solomon Lew wants 50-basis-point cut in official interest rates before Christmas
Topic Started: 18 Sep 2013, 04:43 PM (3,207 Views)
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Premier boss Solomon Lew calls for urgent rate cut to revive retail

RICHARD GLUYAS
September 18, 2013 12:00AM

RETAIL magnate Solomon Lew wants an urgent, 50-basis-point cut in official interest rates before Christmas, as Premier Retail chief executive Mark McInness said the economy was in the "cardiac arrest ward".

The call for drastic action came as Premier Investments, chaired by Mr Lew, lifted net profit by $1 million to $69.3m for the year to July 27, before a $105.2m one-off equity accounting gain for its 26 per cent stake in kitchen appliance maker Breville.

While there are indications of improved consumer sentiment since the Coalition victory at the September 7 federal election, retailers are usually keen to lobby for interest rate cuts.

Mr Lew said it was too early to judge any sentiment rebound and excoriated federal Labor for its "complete disregard" of the non-resources sector for the nation's predicament.

"The economy is in the cardiac arrest ward and it needs to be kick-started," Mr McInness told The Australian.

"The Reserve Bank needs to lower rates again to stimulate consumer sentiment and buffer five years of poor management and legislation by the previous government."

Mr Lew said the economy was in "serious decline", with 80,000 retail jobs lost in the five years, and the business community needed a break if it were to lift its level of investment and start generating jobs growth.

He called for shock treatment through a one-hit, 50-basis-point cut in the cash rate to 2 per cent at next month's RBA board meeting -- and if not then, certainly by Christmas.

Read more: http://www.theaustralian.com.au/business/economics/premier-boss-solomon-lew-calls-for-urgent-rate-cut-to-revive-retail/story-e6frg926-1226721268957
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mel
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this is yet another complete failure to recognize the shift in the retail business model.

Unfortunately the writing is on the wall for many Aussie retailers unless the AUD gets totally trashed.

True story: just a couple of hours ago I was at a chain store in melbourne with my partner to buy a couple of specific items. The prices were so high we held off to see what the prices were like on ebay. Long story short i have ordered the same items from the UK for considerably less including priority shipping from the other side of the planet. Im honestly all for supporting the local economy but there is something very wrong with that.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
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Veritas
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mel
18 Sep 2013, 05:53 PM
this is yet another complete failure to recognize the shift in the retail business model.

Unfortunately the writing is on the wall for many Aussie retailers unless the AUD gets totally trashed.

True story: just a couple of hours ago I was at a chain store in melbourne with my partner to buy a couple of specific items. The prices were so high we held off to see what the prices were like on ebay. Long story short i have ordered the same items from the UK for considerably less including priority shipping from the other side of the planet. Im honestly all for supporting the local economy but there is something very wrong with that.
Mel,

Did it ever occur to you that the high street is suffering because of high staff costs and rents?

Why are staff costs so high? Might it be inflationary pressure caused by stuff like increased housing costs?

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Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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willy_nilly
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Retail started its downward trend from 2003, when the average boomer (then 48) moved from spending to saving.
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mel
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i did mention my surprise at our exorbitant wages a couple of weeks ago Veritas :)

wages couldn't account for the savings made on the purchases we made today though. My comment was directed more at pointing out the benefit of a streamlined business model in 2013 vs the brick and mortar store i went to today full of 17 year old complacent staff members selling overpriced shit
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
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themoops
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This is one Jew BP likes. :bye:
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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Joey jojo shabadoo
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Why would I buy retail when I can get it half price on the internet. Oh right support Aussie jobs well I dont think the 100pc markup is purely supporting aussie jobs. Gerry Harvey go suck eggs!!!
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genX
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mel
18 Sep 2013, 05:53 PM
this is yet another complete failure to recognize the shift in the retail business model.

Unfortunately the writing is on the wall for many Aussie retailers unless the AUD gets totally trashed.

True story: just a couple of hours ago I was at a chain store in melbourne with my partner to buy a couple of specific items. The prices were so high we held off to see what the prices were like on ebay. Long story short i have ordered the same items from the UK for considerably less including priority shipping from the other side of the planet. Im honestly all for supporting the local economy but there is something very wrong with that.
Shhhhhhhhhhhhhhhhhhhhhhh! We want these squeaky wheels to get noticed so we can get another rate cut. Although, it's unlikely Glenn Stevens gives a shit about retail.
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Kulganis
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mel
18 Sep 2013, 06:08 PM
i did mention my surprise at our exorbitant wages a couple of weeks ago Veritas :)

wages couldn't account for the savings made on the purchases we made today though. My comment was directed more at pointing out the benefit of a streamlined business model in 2013 vs the brick and mortar store i went to today full of 17 year old complacent staff members selling overpriced shit
I don't know about other products, but computers and technology is monopolised by Ingram Micro and Synnex as the only mass importers in Australia.

Retailers get vastly inflated products from the distributors, then have to add their own costs on top.

Very few import for themselves, which gives Ingram Micro and Synnex the ability to charge whatever they like and retailers have to wear the flack that the general public gives them.

It really has very little to do with wages and rent, of course, streamlining a business operation and lowering the rent and wages would mean more profit/lower prices.

It's more to do with the fact that we're an isolated, tiny population country.

If we had more people, we would have more purchasing power and the distributors would likely lower their prices because they would be able to ship things more efficiently (as in more product per shipment) and possibly have more stock in the warehouse.

If only we had manufacturing as well as mining, processing of raw materials could happen onshore and we could be exporting goods to the world and have the opposite effect on retail.

But no, the hunt for more profit sent most of the non-niche manufacturers overseas to large population lower wage countries.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

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KaiserSauzee
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mel
18 Sep 2013, 05:53 PM
this is yet another complete failure to recognize the shift in the retail business model.

Unfortunately the writing is on the wall for many Aussie retailers unless the AUD gets totally trashed.

True story: just a couple of hours ago I was at a chain store in melbourne with my partner to buy a couple of specific items. The prices were so high we held off to see what the prices were like on ebay. Long story short i have ordered the same items from the UK for considerably less including priority shipping from the other side of the planet. Im honestly all for supporting the local economy but there is something very wrong with that.
I do this quite often.

For example, go onto Sports Direct and see how much they are selling things for, it is quite a shock.

In particular, items like kids swimwear are dirt cheap in the UK compared to Australia.

But it is not just because people are buying from overseas, online ordering from places like Kogan is the new way forward.

This model also caused one of the largest electrical retailers in the UK (Comet) to go bust recently, people were going into their shop to look at TV's, decide on the one they wanted and then buying online from another store for considerably less.

High street shopping is in decline the world over.
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