Amazon Australia site: Retailers with certain strengths can survive
RETAILERS can withstand the Amazon invasion if they have certain attributes going for them. And experts have identified the Queensland centres most likely to survive and thrive.
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THE Amazon tsunami forecast to smash into the southeast Queensland retail sector is not all doom and gloom, with quality retail centres set to survive and possibly thrive.
An M3 Property Strategists report says the national decline in bricks-and-mortar retail will continue due to increased online competition, but it will not be uniform.
The group’s Queensland research manager Casey Robinson said the expansion of Amazon into the Australian market would impact on property values over time.
“However we expect that there will be a large divergence in the performance of different retail properties going forward,” she said.
“A retail centre’s performance will increasingly reflect economic growth, demographic composition and competition in the catchment area, management and preparedness of the centre, and the performance of anchor tenants.”
The US online retail giant, which test-launches its Amazon Marketplace in Australia today, has leased a warehouse in Melbourne’s southeast, and there are rumours it has another in western Sydney.
Amazon will establish a distribution centre in southeast Queensland in the near future, with reports the company is increasing staffing levels.
However while the Brisbane, Ipswich, Logan and Moreton Bay council areas have been mooted as possible locations, the final site has yet to be confirmed.
Ms Robinson said numerous retail centres across southeast Queensland were expected to continue to do well despite a surge in online competition.
Major shopping centres and retail strips such as Westfield Chermside and James Street in Brisbane, and Pacific Fair on the Gold Coast, were “consumer destinations”, with leisure and dining offerings.
Tourist shopping hubs such as Cavill Mall on the Gold Coast also would continue to trade well.
Regional retail centres and convenience centres in population growth precincts, especially with an older demographic, were also expected to hold back the Amazon tide.
However Ms Robinson said retail centres that may come under pressure included those with oversupplied catchments or weak demographics, and those not willing to adjust to the structural change occurring.
Others in trouble would be fashion and electronics-focused retail centres, or those with poorly performing anchors, poorly managed or run-down centres and secondary centres with weak sales and foot traffic.
Ms Robinson said many landlords and retailers had already prepared for Amazon’s expansion
“While at the start of 2017, Australian retailers were seemingly unprepared and unfazed by Amazon’s expansion into Australia, it appears as though retailers are starting to recognise the need to adapt and improve their services and offerings, both in-store and online,” she said.
“Over the past six months, a number of large retailers have announced coping mechanisms — such as cost-cutting, improvements to delivery and pick-up options, decentralisation of online sales and improvements to in-store services — to compete with the growing online sector.”
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