Customers are bypassing the big Australian retailers online. Picture: Tim Hunter
AUSTRALIAN retailers are rapidly being left behind their international counterparts in the online revolution, new analysis has warned.
Coles and Woolworths in particular are struggling to convert physical presence in the $90 billion grocery sector into online sales, according to the report by Citi analyst Craig Woolford.
In the note, ‘Australian online retailers playing catchup’, Mr Woolford warns that most ASX-listed retailers make around 5 per cent of their sales online, compared with the global average of 11 per cent.
“However, Australian retail spend online is near 11 per cent, reflecting consumers bypassing ASX-listed retailers,” he writes.
Mr Woolford estimates Woolworths generated 3 per cent of total sales online and Wesfarmers 2 per cent in the 2015 financial year.
“Australian supermarkets are below global peers, with the average proportion of sales generated online for global supermarkets at 4.7 per cent for the likes of Tesco, Ahold and Morrisons,” he writes.
“While online sales in grocery are taking share in Australia, we doubt the sales are incremental and likely cannibalise bricks and mortar stores.”
Oroton was the best performing listed Aussie retailer by online sales.Source:Supplied
The best performing Aussie retailers were handbags and luxury fashion accessories brand Oroton, which booked 8.4 per cent of its sales online, and Specialty Fashion Group, which made 6.5 per cent online sales.
Harvey Norman had the lowest online sales at just 0.8 per cent, JB Hi-Fi was on 2.5 per cent, and Bunnings on 1 per cent — less than half the online penetration of their offshore peers.
Solomon Lew’s Premier Investments made 3.5 per cent of its sales online, while Super Retail group was on 1.6 per cent.
Mr Woolford said globally, two-thirds of the 110 retailers surveyed had some omni-channel capability such as click-and-collect.
“However, the pace of online growth is generally slowing and less than one in five global retailers have bricks-and-mortar sales growth accelerating,” he wrote.
“We find many retailers have experienced cannibalisation through online from their stores. Creating incremental profits depends on the ability to minimise logistics cost and maintain gross margins.
“Amongst Australian stocks, Oroton and Specialty Fashion have the highest online penetration and are more advanced in their systems capability.”
