It’s hard to think much about key business activities this week given that the run to Christmas is at full steam. Friends of mine in the USA take their grandchildren on the "Polar Express" every year, it’s a train that sets out with all the goodies of Christmas and arrives at Santa's Cave. The reverse trip back home is more of the same. It’s difficult to get tickets as it is a sought after event and memorable for adults and children alike.
Back in the 1970s when I was Centre Manager of Northlands Shopping Centre in Christchurch we used to have a similar regular annual train and it was an outstanding success. Maybe in years to come we may revisit some of those success stories and reinvigorate Christmas in a traditional form.
"So Christmas is really a time for reflection, and remembering others"
The past business year has been a collection of successes and failures. The New Zealand elections left us in a state of no man’s land for a month and when the dust settled we ended up with a mixed bag of politicians from various parties all suggesting they will work in common together. Time will tell and the jury will be out until after the May 2018 budget is announced. This certainly had an impact on business activities in the latter part of 2017 with most companies playing it cool until some certainty as to who the government was going to be was decided.
The residential market was at an all-time high for demand and prices were at a similar height. As we look towards 2018, I have a suspicion that the apartment market will soften as to price and there may be some good deals available. This has not so much to do with "demand", as that certainly exists, but the ability to fund will send a significant number of buyers into a hold mode until prices can be afforded. It’s a bit like the "cart before the horse" scenario. Contractors also seem to be a little more interested in securing new work in 2018 than they have been in past months. That suggests that some of the heat that has been permeating through the construction industry has abated a little.
Retailing has been focussed on the arrival of Amazon; some retailers have compared it to the arrival of the "Grim Reaper". It reminded me of earlier years when the same was said of the arrival of extended trading hours. All that did was encourage consumers to spend more when they had the time to do it. The Amazon impact will be a bit similar. For those of us a bit long in the tooth, we may revert to comparing prices of product we want to buy on the internet, but we will continue to go to a traditional retailer for that final surety. And I might add, there are a lot of us in that older category!!! So all is not that bad for traditional retailers and consequently bricks and mortar.
During the year I also pledged to pursue the interests of the aged in getting into retirement villages with some sharing suggested in the profit on sale rather than it all going into the pockets of the village owner. Whilst this still has some way to go, I am pleased that some villages are adopting a more caring and sharing approach. I believe this will become more common into the future.
"For me, personally it has been an interesting year. I really passed the baton on at RCG, after having founded the company with John Long in 1989."
It was a challenge for me to move on with my role restricted to lesser activities, however, I felt the time was right, and I am pleased with the condition of RCG, its forward prospects and its quality of governance. I am still involved in some "special projects" and remain a Director of RCG Realty which we will see and hear more of in the New Year, but I am very much more "casual", than before.
Finally, I went to see Paul McCartney on Saturday night at Auckland's Mt Smart Stadium. Those of us who may feel a bit doddery should take a leaf out of this bloke’s book. 75 years of age and a three hour nonstop concert. An incredible achievement by any standards, and a signal that you are only as old as you feel. It was a good way to end the year, full of the joys of life!!
Enjoy Christmas and good wishes for the New Year and we look forward to bringing you the News In Brief again in 2018.
In the fourth of a series on electronics retailing in New Zealand, we’re looking at Dick Smith.
Dick Smith was a familiar sight in New Zealand malls and high streets not so long ago. At its 2009 peak, the company had sales of $360 million here and 80+ stores. Sales had halved to $179 million by 2015, and the company went bust at the start of 2016.
Much has been written on Dick Smith’s collapse. The Australasian business was owned by Woolworths Australia – the same company which runs Countdown supermarkets – for many years. Sales started to decline in 2010, and the business was eventually sold to private equity in 2012, and then floated on the ASX in late 2013. It survived as a listed company for just over two years.
Once a proud retail brand, not much of Dick Smith survives today. An Australian online retailer, Kogan.com, snapped up the Dick Smith brand IP and customer database for $3 million, and still operates a Dick Smith-branded website. The stores, however, are all gone. The main winner was probably Noel Leeming (owned by The Warehouse Group), who’ve managed a remarkable lift in performance that coincides at least in part with Dick Smith’s demise.
In the Press
NZ growth may have cooled in lead-up to election, new headwinds building
The last major economic figures of the year are likely to show an economy cooling, amid warnings that a fall in confidence could soon hit activity. On Thursday, Statistics New Zealand releases economic growth figures for the three months to September 30, a period which included the general election, although the formation of the new government was still several weeks away.
Treasury warns of unintended consequences on foreign buyer ban
Treasury has warned the Government that its rush to ban overseas people from buying existing New Zealand homes may have "sub-optimal" or "unintended consequences". And it further questions the benefit to the general public, saying that there is "low" certainty of evidence that it would ease pressure on the housing market or see an increase in the number of new homes.
Complacency will be tested in 2018
Three mega-trends: unconventional monetary policy, the real economy’s dependence on assets, and a potentially destabilizing global saving arbitrage. After years of post-crisis despair, the broad consensus of forecasters is now quite upbeat about prospects for the global economy in 2018.
Credit card warning for home loan borrowers
First home buyers are being urged to reduce their limit or get rid of their credit cards if they want to maximise the amount they can borrow to get on the property ladder. Research by mortgage broker Mike Pero Mortgages has found a $10,000 credit card limit could reduce the home loan borrowing potential of a couple by $47,000.