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Retailing: Same Shop, Different Scent

The importance of ‘retailing’ to our everyday lives cannot be underestimated.

All of us will engage with the retail sector daily, whether it is buying a coffee on the way to work, doing the weekly grocery shopping or buying that last-minute Mother’s Day present.

Many of us will work directly in the retail sector, as it is the second-largest employing industry in Australia and the largest employing industry among young people (as defined by the ABS). For every retail job, another job is supported elsewhere in the economy, ranging from truck drivers who transport goods across the country, to high-level marketing executives of major national and international brands.

In a planning context, retailing performs a pivotal role in supporting the viability of town centres. As centres move towards incorporating a wider variety of activities, including community, business, entertainment, education and cultural activities, retailing will continue to be a key focus for centres for the simple reason that most of us will engage with the retail sector every day. We need the retail sector to continue to live the lives we live and, therefore, we need to visit centres of various types in order to shop.

As planners and economists involved in the planning and development industry, we are charged with the responsibility of ensuring communities are provided with adequate opportunities to purchase a variety of goods and services, while supporting the opportunities for economic growth that the retail sector provides. At the same time, we need to ensure centres are situated in appropriate locations that will not be detrimental to the many other aspects of land use planning (including social, environmental, traffic, etc).

As an industry, many of our strategic land use planning projects seek to provide direction to Government and the private sector on where and how much land is needed for retailing purposes. In the short-term this can be achieved with a high degree of confidence. However, it becomes a little more difficult when planning for the longer-term, say, fifteen years or more.

Retailers are highly influenced by the ever-changing behaviour and preferences of consumers. For instance, over the past twenty years various changes to the retail sector have occurred that have significantly influenced how centres are planned, including the following:

  • Bunnings opened its first ‘big-box’ store in 1994. Now Bunnings operates more than 320 stores across Australia and employs more than 36,000 people. Many Bunnings stores are located in ‘out-of-centre locations’ and have proved extremely popular with consumers. As a response to Bunnings’ market dominance, Woolworths opened its first Masters store in 2011.
  • The size of major supermarkets have increased to allow for a greater range of products and improved consumer comfort. Where twenty years ago supermarket operators would seek stores in the order of 2,500m2 in size, they now often seek stores in the order of 4,000m2 or larger.
  • Overseas retailers have established store networks in Australia in locations that defy the traditional activity centre hierarchy. These in include Costco (first store opened in 2009) and ALDI (2001) who do not necessarily rely on locations within established centres to be successful.
  • The introduction of internet retailing, which is having an influence on how people shop with an increasing share of retail spending being directed to internet purchases. This is influencing ‘bricks and mortar’ retailing, particularly in retail sectors that don’t rely on the ‘touch and feel’ of merchandise. The decline of book stores is an example of the impact internet retailing is having on some speciality retail sectors.
  • Improved convenience retailing associated with petrol stations has impacted the success of the traditional ‘corner shops’ or local activity centres, with many consumers undertaking this type of day-to-day convenience retailing at petrol stations.

The above changes to the retail sector have all resulted from retailers responding to and influencing the changing behaviour and preferences of consumers – which in turn are influenced by the changing way in which we live our lives. The planning and development industry will continue to respond to these changes. At the State level, changes to land use zones have occurred over the years to provide more (and sometimes less) direction on where certain types of retailing is to be located. Also, local structure plans are responding to the need for centres to be of a certain size to ensure centre viability and the provision of an adequate level of services for the surrounding catchment.

While much has changed over the past twenty years, one thing is for certain…and that is that the retail industry will continue to evolve. Our challenge as a planning and development industry is to continue to maintain an ‘open mind’ as to what retailing may look like in the future, and ensure our planning frameworks maintain a level of flexibility that will enable the community to benefit from future changes to retailing, while protecting the highly-valued aspects of our centres.