Is Retail dying a slow death? (by retail i mean physical stores/shopping centres)
High cost of commercial leases,
Increased competition from Online only stores (ie Amazon),
Incredibly competitive pricing,
Small margins,
It is a great day to be a bargain hunter like me but I gotta wonder if retail is dead or dying?
Went to Highpoint the other day, hard to find a park and really crowded inside. I hear Chadstone was the same (worse?) Retail will be fine.
That was the Black Friday related sale. Boxing Day sales are pretty crap these days so the spend has probably just shifted.
It's more about how much is actually spent across the year rather than just foot traffic on certain occasions.
Chadstone car parks are usually pretty crowded, most days, and there usually seems to be a lot of people there even mid week. However, I do think strip shopping might be in trouble. We have a few shops near us that are empty
Chadstone was bad during the black friday sales, cars were right back to the Monash. Went last night and it was emptier than usual, still people there but you could "feel" that it was quieter
You know one thing that I noticed is how many people are there vs how many people are there holding shopping bags, the bags aren't many to be seen… However, the food places are packed full of people eating, so they are winning on that front.
In a few weeks check out Highpoint during the 24-hour overnight period. It's more of a hangout spot, and that's OK too, but it means the money has been going to entertainment/food businesses from retail goods stores.
yea it was packed, but people are buying less and spending more on food and other service related options than buying goods.
I know, I spend $20 at pancake palour that black Friday for 4 mains and only paid $10 coz of shop small. Hardly profitable business unfortunately for them
i think they are there to escape the smog + free aircond
one industry at a time.. there will still be some retails left tho
Nope, Gerry Harvey single handily revitalised the retail industry by bringing in the GST on $1 plastic trash items out of China.
Hail, Gerry. Hail the great man!
Hmm slowly but surely
I think hardware (Bunnings) shoes chemists and supermarkets will all be pretty stable
But low-medium end day to day clothes are definitely moving online
Rent is high and most shopping centres are looking the same these days (boring chain stores, indicating smaller retailers are doing it tough and the major chains are saturating the market to try and look good for shareholders). My local shopping centre has more banks, dentists/medical clinics, child care, etc where retail shops used to be - they have to fill the otherwise empty space somehow.
Ultimately consider all the things that are bought online and where they had to be bought from before online shopping became big. That can't be good for bricks and mortar shops given their extra overheads. While some of the overseas chains have come here (apart from Aldi changing many buyers behavior/spend, I think the gloss has faded for many of the fashion ones. They have simply replaced local brands.) Most younger people have no idea of the greater variety of physical shops (non major chains) that use to exist (increasing competition). They have pretty much been killed off as they can't compete with even the wholesale sourcing side.
It will change.
We will have fewer department stores, fewer boutique stores, fewer mom and pop stores but in their places will be flagship/display showrooms and discount warehouse style shops.
Just as house prices will always rise to what the general population can afford, retail will always exist to match what the general population have left over.
And they are being replaced by experience stores - dining, movies, etc., that you can't "experience" online.
you mean entertainment industry
Just as house prices will always rise to what the general population can afford
No worries, loosen the lending to 100% LVR with government loan deposit + extend to 50years generational loan passed onto kids
Just keep everyone in debt to get it going.
It will change very quick in the next few years. I reckon David Jones and Myer will pull out of their homewares/electrical departments. When I worked for DJs, reps from electrical brands always used to come in and tell us Myer won't be restocking them anymore once they run out.
The margin on some electrical items can be so ridiculously small it's almost worth not selling.
I buy online a bit. However there are certainly a lot of things I want to see/try before I buy:
TVs, Sound Systems, Headphones - They amount of variety out there, I want to make sure they do what I want. Sure you can see specs online, but how do you know the GUI on the TV works well for you
Clothing - Even within a brand, Nike for example, Some of them feel different sizes on me. Even if it's the same size it's not so comfortable as the last one I had.
You can try on in many stores, then buy somewhere else because it's cheaper. But the more you do, the more stores will close down. Then where will you try on/view that stuff.
Retail is changing and must change, but it's not feasible for a retailer to match online prices on everything.
In my opinion it probably has to go back to its roots. Personal Shoppers and proper service. Someone selling you a TV because they understand what you want and need rather than what makes them the most commission. someone who will pick out a full outfits already in your size and bring them to you rather than letting you browse through 30 racks of similar jackets. If stores get that right, they can bring customers back
As a young professional couple my wife and I don't ususlly have time to shop during "business hours". However, even with 24 hour shopping both of us are so tired we would continue to order online on the couch before bed or during downtime at work because we are too tired to go out. Physical retail doesn't work for DINK professional couples like us who work an average a 60 hour week. We only go retail outlet shopping if we have time to kill or are on holidays (which is usually retail overseas).
And then with kids you’ll have even less time!
Don't forget privatised electricity prices. According to the ACCC in it's 2018 inquiry, the high prices of the privatised electricity system threatens the viability of large and small enterprises. Or the entire economy in other words.
Wrong crowd to ask to formulate any sort of proper result.
Right crowd for legal advice re parking/speeding fines/insurance claims though haha
I love paying 10% gst on 2nd hand items on ebay from overseas. Harvey norman single handedly saved retail in australia.
Don't worry, its OK, all the liberal politicians and superannuation funds own shares in shopping malls, online shopping will be made illegal soon.
I remember a regular customer when I worked at Coles a year ago, who's owned a pharmacy in a mall since the 80s - he said sales only went down around 10% over the years and most of the mall stores aren't overly concerned about the decline.
I do recall he lived in Toorak though so his mall was probably in a very rich area.
You're preaching to the choir, but Ozbargainers are not normal consumers. I reckon most of us spend 90%+ of our disposable income online, never pay retail, etc. Most people don't do this. Neither of my parents use discount codes for online purchases. And it's not just boomers; most of my friends haven't heard of cashback.
Go to the average Westfield on a Thursday, and it's still packed. Sure, the more bloated and weaker retailers are shrinking (Myer, DJs) or dying, especially the generic mid-market fashion chains (Roger David, Pumpkin Patch, Marcs, Payless), but how many of you shopped there to begin with?
i look down on people who still pay retail and do shopping in person
Are you 6’6”?
JB hifi
The electronics retailer's full-year profit rose 7.1 per cent to $249.8 million, boosted by Australian consumers taking advantage of end-of-tax-year promotions.
Its revenue, for the 12 months to June 30, increased by 3.5 per cent to $7.1 billion, with its Australian stores being the stand-out performers.
Plenty of others with growth as well. Only those that refuse to change and offer poor value (DJs, Myer etc) are failing.
Depends on the location, shopping centres in tourist areas will always thrive. Especially ones with high end boutique stores that rich tourists shop at.
The smaller shops at my local shopping centre seem to change quite a bit due to high rent but they always find another sucker to send broke.
TL:DR- there will I think always be some form of physical retail, but many smaller, specific physical retailers will begin to fail.
Currently I would say it depends on what you consider retail. People will always need some way of interacting with POS for goods. Whilst that dynamic has definitely changed in the last ten to twenty years to a considerable degree many people, and many goods still either attract, or require even, a physical interaction between buyer and good in some capacity. For instance with shoes, or clothing, many people prefer to find an adequate fit before making a purchase. Food goods are another instance where many people continue to purchase in person, but one that could be disrupted by streamlined delivery services.
There are probably some retailers who were on shaky legs before the Internet disrupted their trade, or retailers that had a large dependency on foot traffic through shopping centres, which again the Internet has disrupted. Even retailers that perhaps stocked only moderately popular items, who when competition came along just couldn’t compete.
If I was going to open a shop in a shopping centre that didn’t sell the staples of daily living, such as food goods, I’d want it to be situation right next to a shop that did, such as a supermarket because supermarkets and food will probably still be a place where many people will do their physical shopping.
The other possibility is that in future we will begin to see mega-retail, at a one stop shop, becoming more popular, and more resistant to the Internet. Walmart would be a good example of this. The reason that these kinds of shops could become more popular is because as people become more time poor, and do their food shopping it’s possible to entice them into buying non-food goods.
Also, if you consider why it is that places like Westfield can still be functionally profitable I think a large part of that is that shopping centres continue to serve a type of social function for people to interact. A mother, or father with their child might go to a shopping centre to do a bit of shopping, or older people might go to a shopping centre to see friends, and then do food shopping.
If I had to put money into anything retail right now, it would be on big box stores where they function as a one stop shop for everything. Smaller online shops can remain competitive because it’s cheaper to trade online, and it’s so much easier for people to shop online.
Retail not going to vanish, slowly delivery cost gonna go up then back to retail.
drone delivery will take off real quick (already in trial on some towns)
drone delivery did took off and then crash down in my area.
Mainly due to created noise pollution, invaded privacy and deterred native wildlife, particularly birds and lack of products range.
Ohh well, at least it's approved with go ahead in QLD
lack of products range
that will expand real quick
even coffees are delivered by drone
Another one bites the dust - Bardot and Bardot Jnr is under voluntary administration. That's 2 retailers (Baby and Toddler town) within 2 weeks.
Probably more will follow suit, likely chain fashion stores in Westfields.
More retailers would start trading on Amazon just like they have on ebay.
Online sales are only about 10% of total retail sales and this has barely raised from 8% a good decade ago.
Ozbargainers are extreme outliers with their extreme bargain online hunting.
Don’t extrapolate your personal position and think this is how the majority spend.
Fool-pricers reign and they pay fool-price at Harvey Norman.
$60 HDMI cable anyone?
Just go to MSY, thats retail too
Depends on the type of the goods they are selling.
Only physical store i visit on the regular would be grocery chains & clothing stores, anything else is mostly online