Consumers rush back to retail centres after lockdowns

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FOOT traffic across Sydney’s major shopping centres has bounced back since the most recent lockdown, with sub-regional mall visitation above pre-pandemic levels, although city centres continue to feel the pandemic pinch.

According to CBRE, using data from Pathzz across 50 centres, CBD weekly foot traffic level reflect only 14% of pre-pandemic levels, although that is expected to pick up as more workers return to the office. Google mobility data shows workplace movement in the City of Sydney 42% below pre-pandemic levels.

That didn’t drive away Hong Kong’s Link REIT from taking on joint ownership of iconic Sydney retail trio the Queen Victoria Building, The Strand Arcade and The Galeries in a $538 million deal.

Initiatives introduced to attract visitors to the CBD include the Dine & Discover, which include dining and entertainment vouchers, with a focus on Fridays.

Sub-regional shopping centres are receiving 117% of pre-pandemic visitation levels currently, while large format centres are receiving 96%. Regional shopping centres, including major and super-regional centres, are tracking at about 90%.

The data also shows that not only did shopping centres – most notably large format retail centres and those in neighbourhood locations – retain robust levels of foot traffic during periods with no restrictions, but some showed an increased level of activity compared to pre-pandemic levels.

Between December 2020 and May 2021, as restrictions lifted prior to the Delta outbreak, visitor numbers rose 61% and 66% respectively when compared to corresponding pre-pandemic levels.

“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,” CBRE research analyst James Boseley said. Retail spending across furniture and housewares, hardwares and household goods in December 2020 was up by about 20% year on year.

Boseley said the spikes seen in visitation throughout the pandemic can be attributed two-fold.

“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.”

Repeat visits dropped by 47% over the early 2021 period for neighbourhood centres and remain 38% lower over the last six months, while weekends are the prime times to visit retailers, with less people shopping during the work week, although Thursdays remain the most popular day of the week for regional and super-regional centres.

There is also a decrease in retailer visits from younger generations aged 25 to 34 due to increased adoption of online shopping, down 5.7% for city centres and 2.7% for regional shopping centres. The proportion of those visiting super regional centres aged 45 and above has increased, while the changes in neighbourhood centre demographics were less pronounced.

Retailer are looking at experiential initiatives to bring younger shoppers back to the CBD and malls. Rebel’s concept store in Parramatta features virtual games, advice from athletes on shoes and basketball shooting; Kit Kat’s Chocolatery allows customers to create their own KitKat from 30,000 possible combinations, and the BuyNatural experiential outlet allows customers to taste, smell, test and learn about the brand’s products.

The proportion of people driving to shopping centres declined across all asset types – even local neighbourhood centres, where it fell by 15%, while to regional centres it fell by 20% and by 10% for city centres. Buses and trains picked up most of the slack.

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