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Friday 6 July 2012

6 July 2012: Telstra charge increase and Retailer strategic response to online competition


Telstra to increase mobile charges: New range of “Every Day Connect” plans incorporate a 10% increase in call rates to $.99 per minute, a $.05 increase to flag fall rates to $.40, and lower data allowances, which are 500 meg a month lower.  Cheapest smartphone plans increased from $49 per month to $60 per month. Telstra says traffic on wireless network is doubling every 12 months. Telstra signed up 958,000 new mobile customers pushing market share to 44%. Telstra’s annual capital budget at 14% of sales at $3.5 billion, $1 billion of which goes into mobile network infrastructure.  Telstra’s 4G network covers 40% of the population, Optus expected to activate 4G in capital cities in coming weeks and Vodafone committed to launching services next year. (John McDuling)

Commonwealth Bank Facebook banking: CBA plans Facebook banking by end of the year to enable payments to Facebook friends, mobile numbers, and email addresses. Customers will be able to make BPAY payments and transfer funds or check account balances and transactional histories. Android and iPhone Kaching app has been downloaded more than 365,000 times, used to transfer more than $1 billion. [CR: Puts new emphasis on someone “hacking your Facebook”] . (Brian Corrigan, Paul Smith)

Wheat price increase: Drought across US midwest cropping belt drives prices up 31% in past fortnight to 10 month high.  Wheat is at $US8 per bushel, was at $US9 per bushel in 2010 during the Russian drought and below $US13 per bushel of the soft commodities boom four years ago. Expected to continue to increase and affect food prices globally unless weather conditions change. Farmers resistant to forward sell due to threat of El Nino associated with drought in Australia. Last year was a record Australian wheat crop harvest of 29.5 million tonnes, this year is expected to be 24.1 million tonnes. [CR: Wonder if the price increases will be blamed on the carbon tax?] (Sophie Morris)

Salvos Stores increase 8% in sales over 64 stores in NSW and ACT over the past year. Those shopping for fashion reasons account for 15% of the increase. Australian Bureau of Statistics said retail sales rose 0.5% in May, the biggest rise since 2010. Total retail sales rose 3.3% over the year. Influenced by satorialist-style blogs capturing people wearing street style. [CR: Social media influencing retail, although I suspect the government carbon tax payment may have an impact on certain socio-economic areas, as noticed a few days ago.] (Lisa Carapiet)

Flight Centre increase: Boost in corporate and leisure sales contributed to profit before tax upgrade of 18% on prior year. Focus for the year will be on growing business organically by opening more stores and recruiting additional sale staff.  Expected to employ 1000 new sales consultants and open it’s 2500th shop and business.  [CR: Good to see an article about employment numbers going the other way for once.] (Michael Hobbs)

US retailers respond to online: Competing against “showrooming”, where shoppers check out products in stores then buy online.  Best Buy responds by replacing standard bar codes with Best Buy-only bar codes on big ticket items so they cannot be scanned and compared online.  Walmart, Macy’s Best Buy, Sears, and the Contain store now add web return centres, pick-up locations, free shipping outlets, payment booths, and drive-through customer service centres for online sales. Over 50% of sales through Walmart.com are picked up at Walmart stores. In April, Walmart started offering cash sales online, accessed a new type of customer. 40% of customers who paid with cash online used non-cash methods to pay such as check or debit card when picking up in store. The service accounts for 2% of online sales. Sears offers drive through for same day pickup of web purchases.  Container Store VP of stores John Thrailkill: Online orders tend to be larger than in-store purchases, customers who picked up orders in store visited 50% more often than customers who only shopped in store. (Stephanie Clifford)

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