Inflation, apartments suggested as daggers for Barbeques Galore

The financial collapse of Barbeques Galore spells trouble for a great Australian tradition, but it’s a sign of cost-of-living pressures and some people think it’s a consequence of modern apartment living.

On Thursday, Barbeques Galore announced it had gone into voluntary administration due to liquidity issues and just a few months after being acquired by a US private equity firm.

Around 500 staff are now in limbo and online debate revolves around the Australians’ inability to fit barbecues into smaller homes or flats as they raid the city.

NSW Fairtrade will also lead the decision to reduce two-thirds of the value of outstanding Barbeques Galore vouchers.

“The voluntary management of Barbeques Galore is a sign of how tough things have become for working Australians,” said Gerard Dwyer, national secretary of the Shop, Distributive and Allied Employees Association.

“You can’t separate what’s happening in retail from the broader problem of wages not keeping up with the cost of living. While wages are rising, they still lag behind the cost of living.”

“When wages aren’t level, the first thing to do is discretionary spending, and retail workers are the ones paying the price.”

Mr Dwyer said a sustainable Australian retail sector depended on wages rising in line with the cost of living.

Global consultancy firm Ankura has stepped in as receiver and Grant Thornton has become voluntary administrator, it was announced on Thursday.

Barbeques Galore has 68 company-owned stores, while 27 stores are operated by franchisees. Voluntary management does not affect the franchised store.

Founded in Sydney in 1977, the store now has 33 stores in NSW, 19 in Victoria, 18 in Queensland, 14 in WA and five in South Australia; There are three stores in Tasmania, two in the ACT and one in the Northern Territory.

While a business sale or restructuring is being considered, stores will remain open and purchases that have already been made in-store or online, even partially paid for, will be processed.

However, people who have coupons do not have such assurance. Barbeques Galore coupons are actually down by two-thirds, and shoppers must spend $2 for every $1 they want to redeem from their coupons.

For example, to redeem a $100 coupon, the customer must spend $200 in cash.

This short change is a feature of the laws of liquidity, and Barbeques Galore is actually being generous where the laws are concerned; Unspent coupons leave customers as unsecured creditors in the event of business failure.

NSW Fair Trading has said it will review the reduction in voucher value.

Australian Consumer Law requires gift cards to be valid for three years, no additional charges after sale and sellers not to engage in misleading conduct.

“NSW Fair Trading is reviewing whether the recently announced policy on Barbeques Galore complies with the Australian Consumer Law,” a spokesperson said.

Asked about the reduction in coupon value, the national competition and consumer watchdog said the bankruptcy affected consumers’ ordinary rights and protections.

An ACCC spokesman urged people with debt to contact administrator Grant Thornton.

Online, people commenting on Thursday’s news shared previous stories of being left with worthless coupons as other businesses collapsed over the years, including the Borders book chain in 2011.

Other commentators have suggested that modern apartment living has effectively killed the tradition of weekend family barbecues.

The Retail Council of Australia points out that consumer spending is restricted during this period of high inflation.

“The last few years have been extremely challenging for the retail sector, with persistent cost pressures and cautious consumer spending,” council chief executive Chris Rodwell said.

“(Council) is always concerned when a long-standing and iconic Australian retailer faces significant financial difficulties, particularly given the impact on employees, suppliers and the communities they serve.

“Our thoughts are with the team members during this difficult time.”

Mr Rodwell said the problems at Barbeques Galore were a reminder to governments that they needed to support economic growth and investment to secure 1.4 million retail jobs across the country.

US private equity firm Gordon Brothers took over Barbeques Galore in December and David White was appointed managing director.

“Management was excited to turn the business around and move on to the next evolution of the brand,” he said in a statement Thursday.

“Significant progress has been made in recent months leading to significant improvements in business and operations, but ongoing liquidity challenges have led to the necessary restructuring of the business.”