Modern Australian



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

Keep Your Business Safe With These Cyber Security Tips

When you own a business, you want to ensure that everything runs smoothly. This includes not only the normal everyday operations, in general, but also keeping everything safe and secure...

HCF partners with HealthShare to help members take control of out-of-pocket costs

Sydney, 14 February, 2019 – A new initiative launched by not-for-profit health fund HCF will give members valuable information on the out-of-pocket expenses charged by individual specialists. The digital platform...

How to recover from a bad credit profile

If you have a bad credit profile, it’s easy to feel disillusioned about your ability to borrow money from lenders. Don’t panic though – it is possible to recover from...

5 Things You Need to Know Before Becoming a Franchise Owner

Starting a business is always a great opportunity to establish a profitable career. Even though starting and running a business is difficult, the benefits you get to reap once your...

12 most ignored cybersecurity tasks

The string of cyber attacks over the years ranging from the infamous Equifax breach to the recent Marriott hack that put millions at risk makes cybersecurity stick to the forefront...

The Most Common Mistakes to Avoid When Setting up an Office

Designing a perfect work environment is a complex task because you need to adopt a detailed approach and consider more than a few important factors. However, instead of focusing solely...

Popular articles from Modern Australian

Tips for remodeling your basement into pleasant living spaceThe Reason Why You Were Rejected as a Hair Transplant PatientLeconfield Wines: Four legged family members now part of many weddingsModern magnesium: the pharmaceutical-grade topical relief health productWhy you should hire equipment for your next party or eventLiving life without fearFive Trends That Will Transform Beauty Moving home is always complicated but even more challenging in SydneyWhy Chocolate Can Be Good For YouHow to Choose the Right Wedding SuitTop 5 Non-Surgical Cosmetic Procedures for Men in 20192019’s Unforgettable Valentine’s Day Ideas In SydneyFashion Trends to Know in 2019David Lennon:   Five reasons to get your car loan sorted before visiting a dealership5 Sleep-Friendly Bedroom Tips for Career Women