to its older customer base. And, as CEO Scott Evans told Inside Retail, the bigger the better.  “A big box store in a regional town is a lot more economical than a [store] in a shopping centre,” Evans said.  “You get a lot more space for less money, and typically in retail the bigger the shop, the better. You get more turnover in  a bigger space – the challenge is whether you can afford it , and in a regional town the answer [for us] is yes.” The focus on a more profitable path to success is smart, with the business having financially recovered in FY23 to post an pre-tax profit of $4.2 million, compared to an $12.5 million loss the year prior.  This profit was partially paid for by the closure of around 150 unprofitable stores, which left the business with 804 locations across Australia and New Zealand. Customer spending habits have shifted dramatically in recent months, and are expected to remain depressed for some time. Mosaic’s focus on driving profitability through the lessons learned during the pandemic could serve it well.  Mosaic’s larger ‘megastores’ will carry the River’s brand name, but will stock products from its group’s brands, as well as external brands such as Tommy Hilfiger. The idea is to use Mosaic’s biggest brand name to support all of its businesses, while creating a one-stop-shop for its customers to visit and explore. “Whether it’s metro or regional, our two main value brands, Rivers and Millers, can’t do a thing wrong,” Evans explained.  However, the business’ customers are changing somewhat, with spending habits shifting dramatically in recent months, and expected to remain depressed for some time.   Mosaic has subsequently shifted from smarter clothing, such as office and workwear, to more casual styles in the past 16 months or so. Lessons learned According to Evans, Mosaic’s brands were some of the most impacted by the pandemic. But the business’ focus on mature consumers is paying dividends now, with older Australians – who were more difficult to reach in a health crisis – less impacted by rising cost of living.  “It was an exceptionally difficult time, but we’re through the other side as a more emotionally humane and efficient organisation,” Evans said.  “Our market was incredibly impacted due to the age profile, more so than anybody else. The majority [of older Australians] don’t work, they’re not getting stimulus, and so that support [wasn’t there].” According to Evans, one of the key lessons Mosaic has taken from the pandemic is the need to be adaptable amid changing circumstances. The group has placed a  bigger focus on digital, with Mosaic in the midst of an e-commerce update, as well as a renewed plan for its stores.  The ‘big digital’ upgrade will see the business offer a wider range of categories and products on its sites, with plans to expand the group’s global, online presence.. “In the long term, the digital upgrade is going to put us in good stead. We’ve got tremendously efficient warehouse practices now because of Covid,” Evans said.  “The planform is going to allow us to expand exponentially across continents, as well as offer a lot more things to the consumer.” How the  upgraded e-commerce offer and store network will operate in concert is still a work in progress, with Evans noting that Mosaic has traditionally been a bit behind its goals when it comes to omnichannel operations.  Hold the fort Despite the optimism, the business expects a slowdown in consumer spending ahead of the upcoming Christmas period, as macroeconomic factors continue to dampen consumer spending.  Mosaic didn’t lay out its anticipations for FY24, as it is currently “not possible nor sensible to anticipate” what the year could hold, given the variables at play.  The Australian Bureau of Statistics most recent data saw retail spending grow 2.1 per cent year-on-year in July, largely due to unavoidable price increases passed on to customers by supermarkets. All other categories saw sales fall for the second consecutive month. Mosaic hopes that keeping its costs in check will help the group withstand financial pressures while customer confidence recovers.