As the National Retail Association predicts a record $60 billion in festive season sales, CBRE’s latest flash survey finds nearly two thirds of Australian retailers are on the hunt for new stores.
CBRE’s research suggests retailers are planning their post-pandemic assault.
Sixty-two per cent of respondents said they were planning to increase the number of stores in their network next year, and the same amount said they were looking to upgrade the quality and location of their stores. Just 19 per cent said they would reduce their store count.
Leif Olson, CBRE’s director of retail leasing comments, says his team has seen an increase in enquiry across the Eastern seaboard. “Demand has steadily increased since lockdown has lifted, we’ve noticed that retailers with pending lease expires are looking to secure more high-profile locations.”
Forty-three per cent of those surveyed are expecting to renew current leases and 57 per cent to renegotiate.
CBRE’s Kate Bailey, CBRE’s head of logistics and retail research, says fluctuating vacancy rates during the last 18 months means many retailers are looking to capitalise on market conditions and potential softer rents.
“Some retailers looking to make a move to new locations are also driven to do so based on their requirements for larger space, which will support their need to house dedicated click and collect orders or more product displays,” Bailey explains.
CBRE expects the rise of omni-channel retail to continue. But, while half (50%) of retailers agree e-commerce has improved their sales, it is at the expense of customer engagement, with three quarters (74%) saying traditional bricks-and-mortar is more effective.
Olson notes the positive sentiment towards physical space, especially its role as a “primary focus on customer experience”. Some brands that have started online are now moving into bricks and mortar – “a trend we anticipate continuing”.
Retailers remain confident about the future of physical retail, with 60 per cent indicating flagship stores will remain essential to the customer experience, and two thirds (65%) expecting online orders to be fulfilled by bricks-and-mortar stores.