Look no further than Apple to explain the retail woes here

Using the group wide average sales figure for the quarter and applying it to Australian shops, you get total sales here of about $US158 million for the quarter, or about $US600 million for the year. If you use a conservative profit margin of 40%, you get earnings from these shops of about $US240 million. Discount that a little to $US200 million to be really conservative (about $A190 million) and suddenly you can start to understand that why JB Hi-Fi, Harvey Norman and other retailers are struggling.

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7 Responses

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  1. The collapse of retail is global, according to Mike Shedlock even

    German retail is doing it tough. Is Apple the cause of that too?

    by on Apr 30, 2012 at 3:58 pm

  2. The lesson I take out of the article is that if you have a sufficiently innovative, useful, well-marketed product that makes its own niche it will sell like hotcakes at high margins.

    How much of the retail slump is because demand in many categories is already satisfied?

    by Malcolm Street on Apr 30, 2012 at 6:57 pm

  3. Of course the model of showcase/destination stores is nothing new. Most of the top luxury brands in clothes, cosmetics, handbags etc. have been doing the same thing for decades, ie. in addition to selling thru department stores etc.

    Sony have been doing it for a long time too. But it seems Apple has outdone them all. Apparently Apple Stores, at least in the US, are the most profitable retail stores per sq metre of storespace in the US.

    Microsoft have just begun rolling out copycat stores in an attempt to replicate the model. (Ha, Microsoft!)

    by michael r james on Apr 30, 2012 at 10:23 pm

  4. free delivery next day in all major cities when ordering online is also a factor.
    order by 2pm, delivered next day to your door.

    Students and education have a discount. Teachers have their own online apple store.

    by Gary on May 1, 2012 at 10:55 pm

  5. So the fact that Apple products cost the same from a direct Apple retailer or an Apple onseller is a ringing endorsement of the dynamics of the market and competition delivering benefits to consumers then?

    by SBH on May 2, 2012 at 1:27 pm

  6. Retailers here face a difficult position because we don’t make
    anything ourselves - so its a question of being a middle man for
    other producers overseas. To make a comparison, one solution
    to internet piracy from abroad is for Australian TV channels to
    actually make content. Then its aired at the same time as it can
    be uploaded, just like in the US, not three months before it is aired.

    by Altakoi on May 8, 2012 at 10:18 am

  7. The main reason that Apple has muscled in so successfully is what happens when your phone is lost / damaged / stolen. In this case you can only buy a replacement from Apple at their online Apple store!!!
    Happened to my partner just recently and neither of us could believe it - or the price!! ($900.00AUD!!!) No wonder Samsung etc. are outselling them up to 3 to 1 in most world markets.

    by Spamhater on May 8, 2012 at 5:13 pm

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