Is this the Death of Retail Precincts?
A recent item of topic has been discussions around the wavering performance of some inner urban and suburban retail precincts. There was a recent article published in the Sydney Morning Herald, analysing the vacancy rates shopping strips, which highlighted which strips in Melbourne have improved in vacancy rates over the last couple of years. This included Smith Street in Collingwood, which is more of a hipster precinct with a food and entertainment skew.
This is supported by Geotech’s recently released latest edition of The Precinct Prospector Report (based on Mastercard Merchant data), which found that some of Melbourne’s most diverse, hipster strip locations have gained the most ground over the last year in transaction and sales activity – this includes Smith Street Collingwood. However there is still a long way to go for some of these types of precincts.
The below chart from the Fitzroys Walk the Strip report shows the % vacancy rates by strip. Interestingly, the retail strips that have lower vacancy rates tend to be more food and entertainment types of precincts. This is not surprising, considering these types of precincts cater for trade throughout different day and night parts.
Vacancy Rates by Strip (%)
Source: Fitzroys Walk the Strip report
Conversely, other retail strips that tend to be more occasion based retail or fashion oriented have much higher vacancy rates. This includes Bridge Road Richmond, Chapel Street South Yarra, and Toorak Road Toorak. Geotech’s latest precinct prospector report has also found that these strips are either struggling or have had significant declines in transaction and sales activity.
Using the Mastercard merchant data, the example below to the left for Chapel Street, South Yarra shows this strip is well below average performance on transaction activity, with the precinct being ranked 933rd out of 1,218 precincts in the state on transaction activity. In addition, this precinct has experienced significant declines in both transaction and sales activity over the past year.
Another example of a more traditional retail oriented strip, Burke Road Camberwell, now also ranks below average on transaction activity and is in the example to the right below, ranking 778th out of 1,218 precincts in the state.
This demonstrates that not all strip or retail precincts offer the same potential, and even different sections within the same retail precinct can offer different potential for different brands, which should be carefully weighed up before entering.
Precinct Scout visually displays the strength of a precinct on important measures such as transaction and sales activity, which is an invaluable tool for retailers wanting to assess retail precincts. Click here to find out more https://www.geotechinfo.com.au/precinct-scout