This article is from the Australian Property Journal archive
THE bounce back of Australia’s retail sector looks to be in full swing with new data revealing the desire for more stores to be opened in 2023.
It reflects the positive nature of the retail sector is intact despite a rocky few years.
During the pandemic and the hybrid work routines that followed and remain today, the retail sector took a massive hit.
The pandemic left major CBDs empty during lockdowns and afterwards, with workplaces opting to avoid any risk of a spread. When the dust started to settle, workers gradually made a return to the workplace. Workers would spend a couple days a week at work and the rest working from home as the ‘hybrid worker’ became the new norm. It became such a successful method of work that also benefited the employees with a lift in morale as a result that it’s still used by many workplaces.
Even without the pandemic, the desire for Australians to spend has likely waned as a result of skyrocketing interest rates and inflating prices. Despite these setbacks however, the retail sector’s unerring resilience has been at the forefront.
CBRE’s APAC Retail Flash Survey shows that 83% of Australian retailers plan to open more stores this year. Just 6% of respondents said they plan to decrease their network size.
These results follow CBRE research which last week demonstrated retail spend is growing slightly above the inflation rate.
While overall spend is still down on pre-pandemic conditions, statistics reveal that it is on the mend.
61% of retailers plan to increase/upgrade the quality of store locations while half of the retailers surveyed plan to keep the size of their store the same.
While hybrid work is here to stay for the foreseeable future in some work environments – as it has become a happy medium for employees – there are also many workplaces that have returned to normal.
89% of retailers believe that workers returning to offices will have a positive impact on the CBD retail sector.
Head of retail research Australia at CBRE Kate Bailey says the setbacks haven’t stopped retailers from thinking big.
“While cost inflation will present ongoing challenges, given lingering labour shortages and higher operational costs, expansion is top of mind for retailers, with 61% of the survey respondents planning to improve their store locations,” Bailey said.
“One-third of the retailers we polled also plan to increase the size of their store footprints to build more experiential elements into their stores and capitalise on the easing in rents that occurred over the past three years.”
The research also showed that many retailers are happy with retail in its current form.
“Just 11% of the respondents said they would increase their number of click and collect outlets, while 28% said they would increase the number of pop-up and in-store concessions, which suggests that retailers are confident in the future of traditional retail outlets,” Bailey mentioned.
Results of the survey also showed that while 79% expect operating costs to rise for their businesses, 58% are positive about an increase in sales performance for 2023.