Premier Investments chairman Solomon Lew predicts retail conditions will remain tough this year and has urged the government to bring forward plans to charge shoppers GST on small purchases from overseas websites.
Saying the past five years have been "as difficult as I have ever encountered" for Australian retailers, the retail veteran tipped "more of the same" this year as technological changes and international entrants continue to challenge established companies.
Premier retail boss Mark McInnes and Premier Investments chairman Solomon Lew at the company's AGMCredit: Daniel Pockett
But more predictable weather, cheaper penalty rates, and the removal of the $1000 GST-free threshold on overseas websites would help, he said.
"Going into Christmas, people should be relatively optimistic," Premier's retail boss Mark McInnes said after the company's annual meeting in Melbourne.
"House prices are up, people are employed, the politicians have rested for the year, and that should be positive for going into Christmas.
"Those companies who have differentiated product and pricing and staffing propositions can do very well. Those companies that are at the margins – [the recently collapsed] Pumpkin Patch, Payless Shoes, Valleygirl and Temt – are going out of business."
'Cautiously optimistic'
Ahead of the key Christmas period, Mr McInnes said Premier was "cautiously optimistic" provided the weather stayed warm and there were no macro-economic shocks.
From July next year Australians will be forced to pay GST on items priced below $1000 purchased from overseas websites. Mr Lew said an April starting date, however, would be "wonderful, just give us a better Easter" and would help the government's bottom line.
"If they are estimating $30 billion in internet sales within the next five years, if you take 10 per cent of that, it's a lot of money," Mr Lew said.
With the business community keenly awaiting the industrial empire's decision on penalty rates, Premier backed the Productivity Commission's call for Sunday penalty rates in retail to be scrapped in favour of a lower, "weekend" penalty rate.
With about 7000 employees across its clothing brands that include Just Jeans, Peter Alexander and Jacqui E, Mr McInnes said most of its staff did not receive penalty rates.
"It's not the majority of our workforce so for us it's not the biggest issue, it's more that it's just an imbalance in that sense that it costs you more per employee, the less people end up working," he said.
"For the same hour of employment in the United Kingdom, Malaysia, Hong Kong, New Zealand, it costs 100 per cent more to employ the same person in Australia, which is ridiculous."
Bargaining continues
Wages are a hot issue for Melbourne-based Premier.
Premier is renegotiating its enterprise bargaining agreement with the retail union, the Shop Distributive and Allied Employees' Association.
On Friday it dismissed analysis that its wages bill could jump as much as 12 per cent if it is forced to pay penalty rates that the SDA controversially traded away under the old EBA.
"I don't know the factual base for that," Mr McInnes said of the broker's report.
Mr Lew also lashed governments for blowing the proceeds of the mining boom. "Our roads are a disgrace," he said.