CAPÍTULO XX
74 apreciar de espíritus más vulgares o más limitados Este mal difiere de los demás males que he
computer system was installed in the early 1980s. The managing director has since then
been able to access information pertaining to sales of any line of goods in any David
Jones store in Australia. In one case, where the computer showed a downturn in
television sales in a particular outlet, the shop manager was contacted for an explanation.
The explanation was that two sales staff were ill. The managing director was then able
to direct personnel to send extra staff to prevent further loss of sales (Rydges, Dec.
1983: 22 - 24). The above example demonstrates both a significant simplification of
procedures and a concomitant reduction in the ability of store level managers to avoid
interference by higher level managers. A similar situation in a small chain (Rydges,
March 1982: 81 - 83) indicates that the new technology provides an opportunity for
owners of small firms to revert to simple control strategies.
Home-shopping technology is also likely to have a significant impact on the industry in the next decade. While the technology is available for shops to be replaced by direct retailing of products from warehouses to customers at home tele-shopping (that is, shopping from home using information technology) has not spread as fast as was expected. This is partly because the integration of households into an information technology infrastructure has proceeded slowly. Australia is one of seventeen countries which provides public support for a public access videotex system (ASTEC, 1983: xi; Rydges, Aug. 1978 : 26 - 8; 125; Baker, 1982 : 13 - 16). The videotex system would permit shoppers to view items on a screen, order them and pay electronically. The system is not yet widely used for retailing purposes but if tele-shopping takes off it is likely to increase jobs in the delivery of goods. In particular Australia Post is likely to expand (ASTEC, 1983 : 74 - 5).
While EFT is an example of technology in the banking sector influencing retailing, retailing has also been affected by technological change in other industries. In particular this has been documented in the motor retail industry (NRMITC, 1979). In this industry changes in technology used in the production of cars has significantly changed the skills required to sell and service vehicles. Mechanics are now required to possess considerable electronic as well as mechanical skills. Car retailers and service centres must be equiped with machinery to test the performance of electronic parts. In conjunction with computer office technology and automatic fuel pumps the technological change in the manufacture of cars has resulted in a greater capital intensity in the retailing of them. Interestingly, the changes have led to an increase in labour costs in the sales and service areas as they have reduced them in the manufacture of cars (NRMITC, 1979 : 28 - 30).
As in other O E C D countries, then, technological change in retailing has taken the form of introduction of information technology. This has changed the relationship between the banks and retailers; between retailers and their suppliers; and between upper and lower management. The introduction of information technologies appears to be proceeding slowly.
The Structure of Retailing in Australia
As in other O E C D countries, the retail industry in Australia consists of a wide range of shop types and sizes. It includes a growing non-shop component and the largest retailers are growing larger.
Direct selling is an established part of Australian retailing, pardy due to the geographic isolation of segments of the population. More recently, however, mail order retailing
appears to have expanded. Mail order shopping has increased with non-profit organisations such as the Australian National Gallery, aid organisations and various social and environmental organisations selling goods by mail. As yet such enterprises comprise a very small segment of the retail market. Home ordering and delivery of fast food spread in the 1980s. Credit card firms have made extensive use of direct selling. Some large retailers such as Grace Bros, and John Martin have expanded their mail order departments. They sell directly through catalogues using data collected from credit card sales to generate customer profiles which assist in targetting specific groups (Retail Review Jan 1989:13; Dalley, 1982: 66). Job Watch estimates that about 100,000 people were employed in direct selling in Australia in 1986. This represents about 10% of all sales and personal service workers. Most were employed outside of the award system on an independent contract basis (Job Watch, 1986). Many of these are employed in personal network selling organisations such as Amway.
The concentration of ownership in the retail industry in Australia is high (Game and Pringle,1983: 64; O'Donnell 1984: 132: NBMS Dec 1980:7). Concentration of buying power of the largest retailers has continued to increase in the 1980s, culminating in an increased market share of the largest retailers: Coles-Myer now accounts for 20% of all retail sales in Australia and Woolworths- Safeway has 27% of the total food sales. Coles and Woolworths between them account for over 50% of food sales (Aust. Business Nov. 18: 1987: 82). On a sales per head of population basis, Coles-Myer is now the largest retailer in the world, with Woolworths (Australia) the fourth largest (AFR 31.5.88: 17).
Concentration of ownership has been accompanied by diversification into other distribution areas, into manufacturing and into non-retailing activities. For example, Coles-Myer has its own financial network: Australian Retail Financial Network Ltd. On the release of its 1988 annual report, it had six food chains: Coles New World, Liquorland; Discount Food Stores; Red Rooster; Food Service (operates Holly's Restaurants); Sandhurst Foods (meat and dairy suppliers). Coles-Myer also owns seven discount chains: K mart; Super K. mart; K mart Auto; Target; Katies; Specialty Footwear and Fosseys. It owns two department store chains: Myer and Grace Bros. It also owns retailing interests in New Zealand. In total Coles-Myer had 33 subsidiaries listed in its 1988 annual report, many of which have subsidiaries themselves (1988: 77- 9). On the release of its 1988 annual report, David Jones, a much smaller concern and part of Adelaide Steamship, had 'a substantial share' in Nadonal Australia Bank; B u f f u m s Inc. (a retail chain in the U.S.); and a 43.73% interest in Tooth and Co. Limited, which has its own subsidiaries including Penfolds, Kaiser Stuhl, Wynns, Seaview, Tulloch, Killawarra, and Tollana (David Jones Limited Annual Report, 1988:
4-5). Woolworths also diversified in the 1980s, acquiring shoe, liquor and electronics outlets. The growth in the 1970s and 1980s of 'home' brands and generics is a reflection of the tighter relationships between producers and distributors, particularly in the grocery 'trade' ( ( N B M S June, 1978 : 5-7; Bulletin 1983, Feb. 22: 98-101; Potter, 1983).
As an example of diversification within existing stores in the 1980s, Coles-Myer attempted to increase its market share in the fresh meat category:
"We spend more money than anyone else in this country promoting meat - in fact in 1979 and 1980 meat advertising in our company cost us more than $2 million." (Arnfield 1981: 5).
Indeed, Coles invested in the "most modem meat preparation rooms in the world" and began to make use of computers to analyse gross profit and predict consumer demand in this area. They extended the selling area for meat at this time.
Until the 1980s, retailers were uninterested in expansion outside of Australia. David Jones has an established American chain in Buffums (Annual Report, 1988). Burns Philp is active throughout the Pacific region (APR 29.5.83: 12-3). Both Woolworths and Coles-Myer have substantial shares in the New Zealand retail market: Woolworths in Bums retail chain, and Coles Myer in Progressive Enterprises Limited which accounts for 13% of the New Zealand retail market ( A F R 31.5.88: 17). Some retailers have entered into joint ventures with American retailers: Coles expanded in the late 1970s by joining the American company S.S. Kresge in establishing its K mart chain. Coles- K.mart was 20% owned by U.S interests prior to its take-over of Myer. Coles- K mart in turn owned 10% of Woolworths which, now that it has merged with Safeway, is 20% owned by Safeway (Age 7.8.85 : 1; 10.9.85 : 1).
Other overseas companies have attempted to compete with Australian retailers directly. This approach has been taken by large Japanese retailers, Daimaru, which opened an outlet in Melbourne in 1991, and Sogo which is constructing a store in Sydney. Apart from plans of Daimaru to build five more stores, competing Japanese retail groups also have plans to set up retail chains in Australia ( B R W 10 June, 1988: 58-60; Inside Retailing Feb 20, 1989: 5).
Franchising is another area in which overseas companies are investing in Australian retailing. By 1980 there were 195 Kentucky Fried Chicken outlets; 98 Pizza Huts and 116 McDonalds in Australia (Game and Pringle 1983: 65). There is also transnational
franchising the other way. The BIE survey found 273 franchisees of Australian firms operating in overseas markets in 1989 (1989: 18).
The expansion of the largest retailers has been accompanied by changing corporate structures. The largest retailers have diversified into speciality retailing and manufacturing. These diversified structures have then divisionalised . For example, Woolworths divisionalised in 1984 creating five divisions: food, general merchandise; specialty stores; electronics and manufacturing. A corporate services group operates outside of this structure to service the divisions. Each division has its own board and chief executive (Rvdees March, 1984: 41). In conjunction with diversification and divisionalisation the range of house brands has grown (APR 31.12.82: 3) and selling space of shops has increased enormously. Thus Coles 'Extra' stores now stock everything, with shoe stores, bakeries, fishmongers, garden centres within one store.
While the consequences of such changes are not clear we do know that, in the past, structural change of this sort in the retail industry has significandy affected employment conditions in the industry (Nolan, 1989: 285-291). One change which has been noted in response to recent changes is that the in store management structures are flatter with a store manager and department heads replacing a ladder of managerial staff (Aust. Business 18. 11. 1987: 85).
As the discounters have obtained a larger share of the market management has become more centralised. Discounters operate on strict formulae which determine everything down to the colour of the hangers. Every store is designed to the same specifications according to 'planograms' (Aust. Business 29.6.1983: 46-50). One manifestation of this is that department stores are beginning to centralise buying to compete with the centralised buying of discounters ( B R W May 26-June 1, 1984: 29-33). However, Myer in particular seemed to experience difficulty in setting up centralised buying systems (Nat. Times May 23-29, 1986: 9,10). In this case rationalisation of operations appears to have been hindered by unwillingness, on the part of store level managers, to make full use of the technology introduced to facilitate centralised buying.
The increasing size of the largest retailers has been accompanied by a change in the relationship between finance companies and retailers. Many of the large retailers have in the past provided credit to customers. The advantage of the large retailers in offering credit is threatened by Bankcard and other credit cards. The big upturn for Bankcard occurred in the Christmas of 1982 when Bankcard transactions rose from $58m in Dec. 1981 to $75m in Dec 1982 (Aust. Business Dec. 23, 1982: 16-7). These cards gave ready access to credit for shoppers in many stores, not solely the largest chains. By