Online retailing is set to account for between 7 and 8 percent of all retail sales in Australia, up from 2-3 percent currently, says accounting firm Ferrier Hodgson.
James Stewart, a partner at the accounting company, said the British and US retail markets had already reached the 7-8 per cent threshold, and Australia was likely to catch up. “We have a slightly different issue in terms of density of population,” Mr Stewart told the ABC TV’s Inside Business program.
“Our freight costs are proportionately higher for a lot of retailers, whereas in the UK and US market they can spread those freight costs across a more dense population base.
“But I think we’ll get there; we’re early adopters of technology, we’re early adopters of internet activities and things like that, and that’s where we’ll go.”
Mr Stewart said the tough retail environment was partly explained by a growing shift to online shopping, which reduced spending in stores.
Overseas web sites could end up being 5 percent of total sales claims a CitiGroup analyst.
Retail giants, including Harvey Norman and Myer, Target and David Jones, are currently lobbying the federal government to close a loophole that allows online shoppers to buy overseas merchandise free of tax, provided it costs less than $1000.
The companies have argued it is unfair that they have to pay GST and import duties of up to 20 per cent when foreign retailers are exempt.
But I think there are greater factors at play — there’s no doubt there’s the GFC impact,” he said.
“Economically, people are feeling very different. When you see interest rates go up, when you see the cost of living going up, that affects your bread and milk money.
“And then compare it to online; people are starting to research more about what they’re going to buy, particularly when it comes to discretionary items.”
Most retailers had a “pretty tough” Christmas, with a lot going on sale early in the season. This had left them with “nowhere to go” in the traditional January sale period.