Expert analysis has predicted a shocking result for Australian retailers within the first five years of Amazon entering the local market. We’re talking major losses for JB Hi-Fi, Myer and Harvey Norman.
The figures are so damning that Harvey Norman may have already lost market value in part based on the analysis, with Gerry Harvey taking a $100 million hit to his personal wealth.
The analysis, conducted by Swiss investment bank Credit Suisse, found Amazon setting up shop in Australia could directly result in Myer losing anywhere up to 55 per cent of its earnings over the next five years, according to The Australian.
Myer is the retailer at most risk, despite revealing online sales “make up less than 1 per cent of its total turnover” following a website crash over Christmas a few years back.
Also at an “above average risk” along with Harvey Norman, are JB Hi-Fi, Supercheap Auto, Rebel and Amart Sports, BigW, Kmart and Target.
Harvey Norman hasn’t acknowledged the implications of the report, saying it doesn’t know why its shares dropped by 8 per cent.
Credit Suisse analyst Grant Saligari said that many retailers “would not be competitive with Amazon”.
The Good Guys is at lesser risk than the other major retailers, both because its products are bulky (difficult to ship) and its gross margind and operating costs are “relatively low”.
And this is all without Amazon even confirming it’s arrival on Australian shores. There have been hints, though – inlcuding job postings in Queensland and leaks of delayed launch plans to maximise impact.
We’ll keep you updated as we hear more.