Why the government needs to step in to save our consignment stores
The government’s plan to save consignment retailers is under attack from a growing list of consumer groups, who say it’s the wrong approach to tackling Australia’s soaring retail costs.
The Australian Retailers Association (ARSA) says a proposed government-led effort to buy some of Australia’s biggest consignment shops is “not a viable option”.
“The proposed changes are not a viable alternative to the current business model,” said ARSA’s chief executive officer, Ian Campbell.
“We need to stop being an island and start looking at what can be done in the future to keep the existing retailers viable.”
Consignment stores were introduced to Australia in the early 20th century by European traders who wanted to keep prices down.
But they were largely seen as a way for Australian retailers to keep their products out of the hands of foreign buyers.
But the industry has been struggling to stay afloat, with the number of retail stores falling in recent years, and more and more Australian consumers choosing to shop online rather than in stores.
Consignment shops are now struggling to surviveThe government’s proposed changes to the consignment business model will see some of the biggest retailers in the country forced to close.
The changes include a requirement that all new stores must be established within three years and that retailers must have at least 20% of their sales come from online.
Retailers also have to ensure their customers have a “full range of goods and services” on offer and that they are “fully equipped and equipped for the environment”.
The government has also proposed making it illegal for retailers to use a “significant part” of their stores to cater for weddings or other special occasions, as long as they have at a minimum a minimum of 10% of the space to cater to these types of events.
“These measures will not only help ensure a stable supply of goods, but will also ensure that businesses are not forced to go bankrupt or close down as a result of this change,” Mr Campbell said.
“The government will work closely with retailers to make sure that the proposed changes remain in place and will ensure that the impact of this measure is minimised for future retailers.”
Consumers groups are concerned the changes would have an impact on the businesses that have been set up over the years to cater specifically for weddings and special occasions.
The proposed change would also allow retailers to apply to the government for exemptions to the rules and could affect businesses that already operate outside the new rules.
Mr Campbell said the government needed to act quickly to prevent the chain stores from shutting down.
“Consumers need to be aware of the impact this change could have and to make a decision quickly,” he said.
A spokesperson for the Department of Business, Innovation and Employment (DBI) said it would not comment on specific proposals.