Positivity has returned to the Australian retail sector, with new store openings on the drawing board amid a renewed focus on bricks-and-mortar outlets, according to a new CBRE survey.
Of the Australian retailers polled for CBRE’s APAC Retail Flash Survey, 83% plan to open more stores this year, with just 6% planning to decrease their network size.
“While cost inflation will present ongoing challenges, given lingering labour shortages and higher operational costs, expansion is top of mind for retailers, with 61% of the survey respondents planning to improve their store locations,” said Kate Bailey, CBRE Head of Retail Research, Australia.
“One-third of the retailers we polled also plan to increase the size of their store footprints to build more experiential elements into their stores and capitalise on the easing in rents that occurred over the past three years.”
What are your plans for your store network in 2023
The survey also highlights retailer confidence in bricks-and-mortar retail outlets, with 58% of respondents planning to increase their number of stand-alone stores.
“Just 11% of the respondents said they would increase their number of click and collect outlets, while 28% said they would increase the number of pop-up and in-store concessions, which suggests that retailers are confident in the future of traditional retail outlets,” Ms Bailey said.
Other key survey findings include:
- 89% of retailers believe that workers returning to offices will have a positive impact on the CBD retail sector
- One of the top three real estate portfolio strategies for 2023 involves lease renegotiation or restructuring amid growing demand for force majeure clauses after the pandemic and a shift to a turnover rent model, in what is still a tenant-favoured market.
- All respondents reported an increase in fit out costs compared to the period immediately before the onset of the pandemic. While this is expected to moderate in 2023, costs are expected to remain elevated, which will impact some retailers’ expansion plans.