Australian photo processors, including Woolworths, that have Agfa machines and processes installed in their stores now looking for alternative suppliers. Woolworths has Agfa processing kiosks in 115 of its Big-W stores.

Agfa made a half-hearted attempt to make the transition from chemicals to digital but their cameras were uninspiring and never sold in sufficient numbers to save the company. Then they moved the focus of their business onto the supply of processing machines, paper and chemicals, but that also failed to revive the ailing company’s fortunes.

Agfa has its origins in Germany in 1867 and marketed its first colour film in 1936. Until Fuji became a market force Agfa was the alternative to the dominant player, Kodak. Unlike Ilford, which has reacted to the change in photographic technology by using its paper making expertise to move into the production of superior inkjet papers, Agfa appears to have misjudged the size and permanence of the digital tidal wave.

On another front in the digital transition, even though digital camera sales are booming the benefit has not flowed to the smaller suburban camera shops. Electrical goods retailers like K Mart, Dick Smith, JB Hi-Fi, Harvey Norman and RetraVision along with specialist computer shops are eating into the traditional business of the small camera shop.

Robert Heim, director of the retail buying group Just Picture It, says that the traditional camera shop is being squeezed at both ends of the business. “Profit margins on digital cameras are very low and the small shop doesn’t have the other departments selling whitegoods, computers, electrical appliances and furnishings over which the entire cost of running the store can be amortised.

“At the other end the demand for 35mm film and photo finishing services has dropped because photographers are getting their emotional kick instantly from the LCD screen on the camera and many photos that are taken are not being printed.

“A few of the big city camera stores are doing well from selling digital cameras but out in the suburbs the camera shops are missing out on the benefits of the boom.”

The small, individual traders can also be hurt by the catalogue advertising of bigger stores and franchise groups. In June this year the Australian Competition and Consumer Commission found that the franchise group IT Warehouse had advertised in its catalogues “a number of Nikon digital cameras as being available for sale from its stores. However, many IT Warehouse stores had stock levels which were inadequate, or non-existent, and in any event were disproportionate to the discounted price and the level of the promotion.

“The ACCC believed the representations in the catalogues were misleading and deceptive…”

IT Warehouse gave an undertaking to cease and desist but by that time the retailers who brought the complaint had already lost business.

The new technology has created new opportunities and new victims at the same time.

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