Retailers to cut costs for slow season

Australian retailers, already hit by the economic downturn, are finding ways to cut
costs during the seasonally quiet February and March period.
With heavy discounting during the Christmas and post-Christmas trading period
hurting profits, retailers are looking to reduce business costs.
"They would be reviewing their entire business model, which means they would be just
reviewing their supply channels, trying to improve the costs associated with their
products coming in," Australian Retailers Association executive director Richard
Evans said.
"February and March is a seasonally quiet time for (retailers) and what they
normally do is clear their stock out."
"They would reduce their casual staff levels and maintain their permanent staff."
Cutting down on plastic bags has also become popular among some retailers.
Mr Evans said retailers such as the bookshop, Borders, charged for bags while
Bunnings' Warehouse don't carry bags anymore.
"The other thing they'll look at is to reduce their occupancy costs, which means
they'll be renegotiating their leases."
It's not just the small and medium businesses who are looking to save money.
Upmarket retailer David Jones Ltd is budgeting for falls of 7.5 per cent in
like-for-like sales over the second, third and fourth quarters of this financial
year.
But by cutting costs in the business, it still is expects to see its net profit grow
by between five and 10 per cent.
Mr Evans said he is expecting growth to come back to the sector by the end of March,
early April.
Significant growth is expected between June and September.