Most of us understandably have an opinion on this. It’s a bad look. Tourists quickly form a negative impression of the commercial health of our town. Many of us are of the view that there are too many shops and that landlords are too greedy. Perhaps developers are increasingly hesitant before committing funds long term, and a confused Council seems caught and tangled between a strategy of assisting private investment for the future and a negative strategy of introducing confusing restraints to slow down new commercial projects.
‘For Lease’ signs are highly visible throughout the CBD, regional shopping centres, and in the industrial areas. So, what is happening?
Retailers will unhesitatingly blame landlords for rents that are too high. Equally, they will point to the slow creep of more and more national retailers setting up in the Bay. More will come. Supermarkets are increasingly competing for product lines previously only available in specialist shops. Margins are being squeezed through schemes such as Afterpay.
Talk to economists expert in retail property space as a ratio of population and they will say that Australia has too much retail space. Talk to locals and they might blame the main street empty spaces on the popular Village Centre.
Certainly, the uptake of online retailing is also a strong contributing factor. Landlords will suggest retailers are not innovative enough. The community, lacking in confidence that elected governments have sufficient control on our nation’s economy, is understandably spending less. Generational change is also a powerful influence impacting on the range and type of product on offer, the price, and ease of availability. An afternoon spent on ‘retail therapy’ may not have the same appeal as for an earlier generation.
The reason for so many empty retail and commercial outlets may be a combination of all of the above.
Retailing as most of us have known it is clearly changing. It has of course always been evolving. My generation will remember a wide range of delivery services to the home. Milk, groceries, newspapers, and door-to-door salesmen selling anything from drinks to diapers.
While these days we may not necessarily rush through our general shopping, we are often less motivated to take the time to compare quality and price. If we trust a certain outlet, say a supermarket, and regularly return to that outlet for comfort and convenience, we mostly ignore the minor savings occasionally offered elsewhere. It has been said that retailing is 50% product and 50% perception.
My business background was in the newsagency industry. For 25 years I witnessed the decline of the neighbourhood newsagency as a younger generation found other ways to source news and information. It was increasingly obvious to me that newspaper publishers were investing heavily in the then emerging technology of direct and immediate delivery. Your morning newspaper can now be delivered to your bedside iPad. Retailing, and any form of business, will and must progressively change to satisfy shifting demand.
Amazon, Uber and Airbnb are perfect examples of modern businesses more competently (and more profitably) dealing directly with their customers by efficiently by-passing traditional and outdated third-party services.
I am a believer that ‘the market’ itself is not interested in addressing the over-supply of retailing square metres in Batemans Bay. Our community and local government (theoretically the same) are therefore required to act. Similarly, the community and local government are required to act to address the shortage of tourist beds in our town caused by the coming closure of our largest private caravan park as well as possibly 4 motels. Airbnb (and other holiday letting agencies) and serviced apartments will address much of this shortage but only if our Council (with the support of State Government) removes all impediments to the emergence of this new, more popular and more relevant option for holiday letting.
Addressing the perceived over-supply of retail space will be a little more difficult – as it will be elsewhere. Landlords are commercially reluctant to reduce rents on their asset because to do so reduces the value of that asset. A ‘vacancy tax’ may or may not be legal and, at least in my view, would be counter-productive given that a negative rarely generates a positive. Rather, landlords could be offered incentives by Council (eg, temporary suspension of Land Tax) as an encouragement to find tenants. Perhaps subsidies could be offered if a landlord installs, say, 3-phase power or a grease-trap.
Council would be conscious, I hope, that rezoning of marginally profitable retail space could better shape our CBD space.
But the pace and nature of retailing change everywhere is inevitable and mostly predictable. Previously valuable retail areas are now progressively being monopolised by services such as gyms, masseurs, vaping stores and cafes. In cities and larger regional towns, retailing has moved out of the CBD to ‘big box’ retail centres similar to the Canberra Airport complex. Studies have shown that communities are mostly satisfied with the larger nationals and franchises offering a better range of product, better prices and seemingly more jobs. The cost to that community is fewer local retailers and profits that flow from the town.
Batemans Bay is not alone. The traditional retailing model is not necessarily broken, but it is rapidly changing. The components of this change will create the unavoidable perfect storm. Council must ensure that it is capable and willing to facilitate this change. A CBD retailing area dominated by a balanced mix of mostly national retailers may eventually serve the community well, provided that this space is functional, inclusive and balanced with practical recreation areas.
Kim Odgers
August 2019
