Newspaper and TV readers and viewers could be excused for thinking that the likes of David Jones and to a lesser extent, Myer make up the Australian retail sector, so dominant has the coverage of their recent sales reports been. Commentators and analysts, not to mention "experts", have extrapolated their weak sales efforts to the rest of the retail sector. But on the most recent retail sales data, department stores account for under 8% of turnover in the sector. And why do some retailers strike trouble when some battle through with their sales lowered, but reputations intact? Consider two stories this week from small retailers that not only coped with cautious consumers, but the floods in January in Queensland and NSW. Retail Food Group (RFG) dominates the shopping centre food court business through chains such as Michel's Patisserie, Brumby's Bakers and Donut King. It is positioned centrally in the restaurant, cafe and takeaway food sector. Yesterday we showed that until last year that was one of the strongest performers in retailing, but since then it has flatlined as interest rates headed up. And RFG had the added problem of many of its outlets in southern and central Queensland and northern NSW were closed earlier this year as shopping centres and other retail zones were flooded for several days. It was a similar story for The Reject Shop, one of the better performing retailers because of its pioneering work at the bottom of the discount pile, the so-called "$2 shops". Like RFG, it was hit by that slowdown late last year and then its new multimillion-dollar distribution centre at Ipswich, west of Brisbane, was flooded in the January floods, a disaster that knocked the company sideways. Both groups survived. Why? Good management  and working with staff and franchisees, got them through. There was very little publicity for both groups and yet their performance is arguably better than anything else from the retail sector -- not in absolute sales of profits, but keeping going through  adversity. That's because in retail, the quality of management is critical. The Wesfarmers-owned Coles Group has picked up its game in the past year or so with higher sales growth than Woolies, and rapidly improving profitability. The major reason is the better quality senior managers imported from the UK and from other companies (McDonald's Guy Russo at Kmart).  The UK is a far larger, and therefore more competitive, retail market, and the Brits have sharpened the performance at Coles after years of woeful leadership. It's no coincidence that Woolies this week chose a European executive with experience in Holland, the UK and Asia, as its new supermarkets head. It says more about the weak quality of management and the failure of the retailer's board to maintain internal continuity than any other decision to emerge from the retailing giant in recent years. JB Hi-Fi had a solid 2010-11 with higher profits and sales, even if electronic and electrical sales have slowed dramatically in the past 12 months (and CD and DVD sales aren't a growth market either anymore). The company kept on the right side of the ledger and went through a change of CEO, while Harvey Norman, its big rival, has struggled, despite operating across a wider range of products. But Harvey Norman is a very different retailer to JB Hi-Fi. It's better understood as a property company that rents space in its shopping centres to franchisees. Its retail performance and structure really doesn't allow it to be a good guide for the Australian consumer products sector. JB Hi-Fi is busily killing off its weak Clive Anthony's chain name and other shutting stores or converting them to the JB Hi-Fi name. Harvey Norman paid $55 million for the failed Clive Peeters chain a year ago and killed it off last week in a similar announcement. Both of these decisions flowed from poor management: JB Hi-Fi should have folded Clive Anthony's into the stronger brand straight away and Harvey Norman shouldn't have bought a company that had failed. At least Gerry Harvey readily admits to the mistake -- a frankness unusual in retail circles. These corporate and management differences are rarely mentioned by economists, some analysts or media writers, and yet they can be the most important factor of all in retail, especially in a sluggish environment. Red Group, which controlled Borders and the Angus & Robertson bookshops, failed because of a poor model: it was owned by private equity, which got rid of many of the staff who knew how to sell books, and a lot of debt was loaded on the group. So when sales weakened under pressure from online retailers, it was not in a position to withstand the damage. Colorado Group was another private equity-owned retailer crushed by a poor model and huge pre-GFC debt. It wasn't given the financial room to adapt to a slowdown in clothing and footwear sales. There's another key factor: many retailers and commentators have been slow to understand there is a major demographic change under way: the baby boomers are starting to retire. Consumers, as they age, don't consume as much, and when they retire they consume even less. The push to retain would-be retirees in the workforce might delay actual retirement, but it won't mean more money being spent and products consumed by boomers -- only more savings and spending on services such as travel, eating out and books and entertainment. For this reason alone, the days of broad retail sales growth are probably over. Consumers in succeeding generations are more used to buying online and trying before buying. They will need food, liquor, cars, clothing and footwear as they form relationships and build families, but retailers shouldn't depend on old strategies such as sales to sell to them. Why buy at a David Jones or Myer sale when you can buy it online? Online retailing, too, is more complex than acknowledged by commentators. GraysOnline, StrawberryNet or Appliances Australia are very successful Australian online sites -- no sales going offshore, all GST paid, no advantage from a strong dollar. Appliances Australia is owned by the Winnings Appliances group in Sydney, and its online performance shames whatever level of service Gerry Harvey can offer at Harvey Norman. Quality of management, relations with franchisees, local online retailers, demographics -- all key reasons why the retail picture is far more complex than you've been told, and certainly more complex than some retailers would like you to think.