THE GREAT RETAIL SHAKE-UP
Written on the 17 November 2015
HISTORICALLY dominant retailers are either changing their approach or dropping out of the market slowly, according to the latest retail research from Colliers International.
Many of these established retailers are being forced to evolve and adapt in order to survive the retail industry of the 21st century.
Colliers International head of retail Michael Bate says the retail shake-up is completely unexpected, but reflects the changing needs and habits of the consumer.
"Our industry is undergoing an unprecedented period of disruption, as these established players have been forced to evolve in order to meet the changing demands of the consumer and revive profitability," says Bate.
"These changes are opening up new opportunities for the many emerging brands in Australia, who are looking to gain a foothold in an established and well-heeled market."
The biggest impact of this retail shake-up has been felt by the supermarket and department stores.
David Jones, which was purchased by the South African-based Woolworths chain last year, is undergoing a dramatic change under new ownership - even turning to fresh food to shake it up.
The other department store juggernaut, Myer, is slowly decreasing its property footprint in some instances withdrawing completely from key areas.
Bate says this withdrawal will give newer brands opportunities to establish themselves in areas previously inaccessible.
"Myer and David Jones have been two of our most significant retail occupiers for decades," he says.
"They have controlled a huge portion of the most sought-after, highest visibility retail space across the country. With their rationalisation of space, comes a huge opportunity for the emerging brands to establish themselves in well-located retail spaces with good foot traffic and exceptional visibility."
In the supermarket world Aldi is staking its claim of market share, having grown to a current estimated market share of 11 per cent.
Lidl, another international supermarket giant, is taking advantage of recently vacated floor capacity and is potentially planning to enter the Australian market.
Consumer familiarity with these international brands is an integral element to the success of supermarkets like Aldi and Lidl to succeed in Australia, says Bate.
"The march of international retailers into our country is nothing new, but the second, third and fourth waves of these will continue to come.
"Australia's savvy consumers know these global brands, making their move into the Australian market an easy one."