CEO INSIGHTS – Week Ending 18 October 2024

Payments surcharging

“With the volume we do, we are paying more than $10 million a year to the card companies for the privilege of them doing the transactions for us. Even though we don’t surcharge, we have to cover the cost – so that is built into the margin that we charge.” Jack Gance, Chairman, Chemist Warehouse

“Consumers shouldn’t be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay hefty fees just to get paid themselves,” Treasurer Jim Chalmers

“We are supportive of a ban on debit card surcharges but only if there is reform that effectively eliminates the current massive gap between what large and small business are paying,” Theo Foukkare, CEO, Australian Association of Convenience Stores

Cost of Living

“We’re starting to talk about 2025, and my message to our teams has been: ‘We need to be preparing for another challenging year...We need to be making sure that we’ve got a really strong value proposition in all of our markets.” Chris Kempczinski, CEO, McDonalds

“I don’t think anyone out there feels better now compared to a year ago, and that is showing up in the hospitality industry.” Suresh Manickam, CEO, Restaurant & Caterers Association

Housing

“This supply crisis, driven by a shortfall, means demand for limited houses further pushes up prices and rents, driving higher inflation, which hurts all Australians.” Bran Black, CEO, Business Council of Australia

“Queensland has by far the best process, with a very large council, being the Brisbane City Council, where they stick to their dates and are very clear where development can and cannot occur.  Adelaide is second best with a good process. Victoria has some good councils and some very difficult ones. Sydney is extremely difficult, as is reported consistently.” Tim Gurner, CEO, Gurner Group

Education

”We know from the experience of other jurisdictions that if government funding is not set and maintained correctly, this kind of reform will significantly limit the capacity of the sector to provide high-quality, innovative and inclusive early learning and care, and threaten the viability of services,” Elizabeth Death, CEO, Early Learning and Care Council of Australia

Electric Vehicles

“I think there’s a perception often that electric vehicles are slow and sluggish and will ruin your weekend. But [the Shark’s] acceleration is 5.7 seconds from 0 to 100 [kilometres per hour] – that’s a heck of a lot faster than most of our rivals.” David Smitherman, CEO, EVDirect [Australian BYD Distributor]

Wealth Management

“There’s going to be consolidation. There’s no doubt there are probably too many platforms in the Australian market, and we will see consolidation. I think we will start to really see that take place over the next 12 to 24 months.” Matt Heine, CEO, Netwealth

Semiconductors/AI

"While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness." Christophe Fouquet, CEO, ASML (leading supplier of lithography for semiconductors)

Energy

“It has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome,” Frank Calabria , CEO, Origin Energy

Travel

“Consumers have chosen to close their wallets on big ticket discretionary expenses in response to the ongoing economic uncertainty.” Grant Webster, CEO, Tourism Holdings

Consumer

“Overall, demand for big and bulky products remain somewhat challenged with continued soft demand for furniture and modestly soft trends in exercise equipment and appliances.” Nicholas Hobbs, COO, J.B. Hunt Transport [major US logistics business]

“Demand has been characterised by two opposing trends. On the one hand, demand from China clientele remained fairly dynamic in the first half of the year. However, Chinese consumers are facing growing macroeconomic headwinds, which obviously impacts their confidence and weighs on their discretionary spend. And on the other hand, demand from Western clientele shows a sequential improvement, this being very gradual given that inflation and interest rates remained high.” Cécile Cabanis, CFO, LVMH Group

M&A

“We are seeing increased client demand for committed acquisition financing, which we expect to continue on the back of increasing M&A activity.” Denis Coleman, CFO, Goldman Sachs