In Real Life

CHOICE: Retailers And Distributors Must "Pass On The Savings"

CHOICE, a consumer watchdog, has hit out at the retail mark up of goods in Australia, with specific reference to the cost of video games, considering the strength of the Aussie dollar – and has posted a submission to the Productivity Commission encouraging retailers to pass on the savings to consumers.

Currently the Productivity Commission is looking into importing and retail structure, and a submission made by Choice specifically referred to the price of video games in stores in this country.

“Australian consumers are able to save about 90% on the price of Portal 2 for Xbox 360 and PlayStation 3 if they purchase the game from Play-asia.com rather than Dicksmith.com.au,” read the submission. “Even with a delivery fee of US$15.40 for FedEx (which includes tracking and insurance), there are still significant savings to be made.”

Late last year the Productivity Commission was asked to look at the retail situation, as a result of dramatic increases in imports of goods, in response to retailers concerns. But it looks like this move may end up backfiring, as the commission looks at the structure of retail, and the ways in which it has to change according to the ease with which consumers can now import.

“In our Submission to the Productivity Commission, lodged today,” said CHOICE, on their website, “CHOICE calls on importers, distributors and retailers to pass some of the savings they are enjoying thanks to the strong Aussie dollar on to Australian consumers. We are already seeing the results of their failing to do so – a massive uptick in Australian consumers shopping on overseas websites.

“Who can blame them when Xbox 360 and PlayStation 3 games, for instance, cost 91% more from a major Australian online retailer than from an overseas online website based in Asia? Or when a pair of Nike running shoes cost $240 at a major Australian sports retailer while the same product can be bought online for $134 from a US sports store?”

Strong words. But Christopher Zinn, CHOICE director of campaigns and communications, took it a step further, claiming that the rapid increase of Australians buying goods overseas was more than justified.

“The pressure from overseas online competition is a much needed wake up for Australian retailers to be more competitive,” he said. “We need to move beyond a complacent culture of high prices, high margins and poor service.”

We have written extensively about the price of video games in this country. While we support the local industry, the fact of the matter is, more and more gamers are finding it easier and cheaper to buy games from overseas.

It’s a complicated situation, with retailers claiming that cost price of goods is too high, and publishers pleading poverty when it comes to shipping and distributing costs. But where are the savings going? That is the question. Clearly the Australian dollar is sitting pretty, so savings must be occurring at some point in the retail chain – where is this money going, and why aren’t consumers seeing the benefit of it?

That’s the million dollar question.