Retail centres holding their own despite pandemic, says CBRE research

Retail centres holding their own despite pandemic, says CBRE research

Photo: Westfield

The pandemic may have been tough on the retail sector, especially in city CBDs, but according to new research from CBRE, when consumers broke free from lockdowns they had such an appetite for bricks-and-mortar shopping that it drove visitation in some retail centres to new highs.

However, in a note of caution, the research reveals that a drastic change to the retail mix is needed as Millennials are increasingly opting for online shopping.

The research conducted by CBRE in partnership with Pathzz, analysed consumer behaviour across 50 retail centres in Greater Sydney and discovered that some retail properties were actually enjoying higher customer visitation than before COVID hit.

“Retail centres have seen robust levels of foot traffic throughout the pandemic, showing increased activity compared to pre-pandemic levels during periods with no restrictions or lockdowns,” says the Pandemic Insights report.

Neighbourhood and regional centres bounced back to between 80 and 90 per cent of pre-pandemic foot traffic when restrictions were lifted, although sub-regional centres were the ones that outperformed with customer visitations higher than they had ever been over the previous 24 months.

“Large format retail centres focused on homewares and electricals have proven to be the winners in retail during the past 24 months, as Australians were inclined to improve their home environments,” says CBRE research analyst James Boseley.

However, the analyst notes that spikes in visitation throughout the pandemic were caused by two one-off factors.

“In between times of lockdown and eased restrictions, consumers were either one-time bulk buying, between bouts of no visits, or splurging on shopping sprees as a form of ‘revenge shopping’, celebrating their release from home confinements.”

Notable trends revealed by the research shows that weekends were the preferred time for shopping during the 17 months from June 2020 to November this year, with fewer people choosing to shop during the working week.

Also, millennials, those aged from 25 to 34, were not the ones driving the spikes in shopper numbers as overall they were visiting shopping centres less often due to an increased appetite for online shopping.

The CBRE report highlights the changes that need to be implemented by shopping centre owners if they are to fill vacant spaces left in the aftermath of lockdowns, particularly from fashion retailers that have been among the hardest hit.

CBRE’s head of retail centre leasing, Lewis Torkington, says promoting experiential activity is one area that more shopping centre owners are exploring.

“Experiential retail is providing a clear point of difference versus online retail stores,” says Torkington.

“It gives customers an immersive experience that improves customer engagement, promotes brand awareness and can enhance both in store and online purchases.

“Retailers that have already put in place experiential activity to encourage visitation includes Parramatta’s Rebel Concept Store which features virtual games, advice from athletes on shoes and basketball shooting.”

Torkington also cites online retailer BuyNatural which opened its first concept store to enable customers to taste, smell, test and learn about the brand’s products, before purchasing online.

“While shopping centres are known to have always executed experiential activity, they are now also revitalising any vacant shop fronts too, using them as creative places for activity, including pop-ups, artworks or galleries.”

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