Not all doom and gloom for retail

  • Written by David Krolikowski

 

"Retail not beyond saving – but the blame game needs to stop"

 
 
With retail groups copping a battering during the February reporting season, a Melbourne commercial property expert says that there is a future for bricks and mortar retail – but only if tenants and landlords commit to work together.

David Krolikowski, of Melbourne’s KHQ Lawyers, said that despite the increasing threat of online retail and changing consumer habits, landlords and tenants needed to embrace the idea of collaboration and share the burden of increasing costs for a successful future.

He also suggested that bricks and mortar retailers needed to change the way they sell in order to offer a distinct point of difference and keep customers coming back.

Amazon’s arrival in December led to analysts forecasting retail doom and gloom, while many large retail groups are feeling the pressure as they deliver half year results,” Krolikowski said.

“Landlords and tenants need to accept the reality however and tackle the online challenge head-on to keep physical retail operating successfully.”

“Overall, those invested in bricks and mortar property (shopping centre and shopping strip owners and their tenants) need to work together to confront the changing face of retail –that is primarily online alternatives, but also by pop-up shops, and a community that is increasing connected both with international suppliers and each other.”

“Landlords who expect that tenants will absorb all increases in outgoings while maintaining or increasing base rents are killing their golden goose, so to speak, so they need to reset their expectations, with an eye on market changes, rather than simply seeking year on year growth.”

“In the current environment it’s not realistic for landlords to simply forecast increased revenue year on year. But when that expectation is imposed upon their staff in the form of KPIs, it can be very difficult for a leasing executive to take a softer stance, without being seen to have failed.”

“Then there is a tendency to blame the other party.  Tenants who continue to do retail the same old way and expect to obtain the same returns are kidding themselves when they blame landlords solely for their woes.”

“The challenge for businesses is to do it better – be active in marketing programs, take advantage of opportunities to advertise, and experiment with things like temporary attractions, or taking on space near competitors to maximise ‘critical mass’ foot traffic.”

“Likewise, landlords that expect that their only role is to provide a physical location for tenants to occupy, consider it’s up to the tenant to do the rest, will find themselves with increased vacancies.”

‘Offering something that isn’t available anywhere else, or by providing another reason for shoppers to visit – like cafes and food outlets should all be a part of forward thinking, and again that is something that needs to collaborative.”

“It’s nothing new, but it’s not that common either.”

Krolikowski added that retail tenants operating in traditional retail sectors also needed to consider that as times are changing, they might be squeezed out by the next phase of retail tenants – such as health services, personal services, food & beverage, even car manufacturers.

“At the end of the day, retail still has a future – it simply needs to adapt, and that goes for both landlords and business tenants”, Krolikowski said.


 

"The challenge for businesses is to do it better"

 

Business

6 Ways to Improve Your Small Business Cybersecurity

If you think your small business is immune to cyber threats, think again. For cybercriminals, small businesses are a soft target as they are least equipped and hardly spend on...

Investing in local start-ups: what you need to know

Investing in a new, growing company or a start-up can be a great opportunity. As well as the possibility of making substantial profits as the company succeeds and expands, you...

Online Jobs That Will Make You Wealthy

It’s the era of freelance and the internet! These days, few people (especially if you are a Millennial or a Gen Z) are committing to fixed working hours. This is...

Why is SEO so Vital for your Company’s Growth

SEO or Search Engine Optimisation is one of the most wrongly perceived terms in the marketing world. Due to SEO’s biased characterization over the past years, it has resulted in...

5 Small Business Threats You Might Have to Face

Many of us dream about running our own business, and while this can be rewarding, it also comes with a certain set of risks you will simply have to take...

Why Hiring An Online Marketing Agency Is Essential To Your Business?

Nowadays, digital or online marketing has become popular in almost all kinds of businesses around the globe. It can promote your business product or services rapidly online, that’s why more...

Popular articles from Modern Australian

6 Rug Trends That Will Boost Style and Comfort in Your HomeVirectin Reviews and Results (LATEST) - Honest ReviewSafety Management Systems & its importance: Workplace Health and SafetyPut your problems to rest with Antenna GenieHow to Choose the Best Lasik Surgeon?? It’s as easy as it can get!Here’s Why You Need to Own Shipping Containers Right AwayThings to Do and See in Ballina, AustraliaLaser Liposuction: The Myths and FactsHow To Show Your Elderly Relatives Love9 Ways to Recognize the Early Signs of DementiaTop 5 Design Trends in Commercial InteriorCo-Occurring Disorders and Overcoming AddictionGuide to Travel Necessities for 2018Fun Activities for Spending Quality Time with Your KidsTop Sightseeing Spots in New Zealand