26 Feb 2018
Bricks and mortar do have a role in the future of retail, according to Russell Zimmerman, Executive Director at the Australian Retailers’ Association – just on a smaller scale, he says.
Speaking to A’n’Z of Economics on podcast, Zimmerman said the trend would not just be seen in large department stores but across the board in the sector.
"We're seeing retailers look at the size of their footprint and bring the size of their shop down.” - Zimmerman
“We're seeing retailers look at the size of their footprint and bring the size of their shop down,” he said.
Zimmerman was a guest on the podcast alongside Richard Li, the Chief Operation Manager for Miniso, a Tokyo-based retailer which has recently opened stores in Australia. You can click below to hear an edited version of the comments – or go to the A’n’Z of Economics Soundcloud page to listen to the full podcast.
Zimmerman said on-the-shelf products at these smaller stores would also serve as samples to entice buyers to shop online.
“Why do you need 120 or 130 square metre stores?” he said.” I think we're going to see some really big structural changes and I don't think that the landlords have really come to grips with it”
He said growing overheads related to physical stores was becoming a bigger issue for the retail sector.
“I think the big issue for retail facing Australia at the moment is the cost of the landlord,” he said.
Miniso agreed. He said rent was a key consideration for offshore groups when considering entering the Australian market.
“We've been doing a 2018 budget review,” he said “On one side we have our ambitions expansion plan, but on the other side it's like, what's the cost?”
The conversation also touched changing consumer spending patterns and the apparent spending shift toward ‘experiences’. Listen to the podcast above to find out more.
Jo Masters is Senior Economist at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
26 Feb 2018
01 Aug 2017