Shoppers Return To Malls As Consumer Confidence Makes A Major Recovery
Scentre Group, which owns Westfield shopping centres, reported that customer visitation has picked back up again in recent weeks. Last weekend Westfield’s customer traffic was double that of five weekends ago.
“We saw a big upswing in foot-traffic over the Mother’s Day weekend. This is a positive sign for retailers, and reflects the suppressed demand for shopping after the lockdown period. This will be a slow recovery period however, and we do expect this activity will level out as people return to more regular habits,” Paul Zahra, CEO of the Australian Retailers Association (ARA), told ChannelNews.
Vicinity Centres, which has approximately 70 shopping centres in Australia, has witnessed a similar trend. On the 6th May Grant Kelley, the CEO and Managing Director of Vicinity Centres, said: “Over the past week we have seen early signs of a recovery in centre visitation, as restrictions have begun to ease. Retailers who closed their stores voluntarily in prior months are beginning to reopen for trade with 530 stores reopening in the past seven days.”
A spokesperson for GPT Group told ChannelNews that they saw a double-digit increase in traffic last week compared to the week prior.
AMP Capital also reported higher traffic at its malls over the past week. “Across the portfolio, we have recently seen increased traffic and sales in the lead up to Mother’s Day, usually one of the strongest retail trading events in the year,” an AMP Capital spokesperson told ChannelNews.
The Westpac-Melbourne Institute Index of Consumer Sentiment for May, released today, reflects this improving consumer confidence. The index rebounded 16.4%, which is the index’s biggest monthly gain ever. Nevertheless, confidence is still at a low level compared to historical figures, with May being the second-lowest reading since the GFC.
The ‘time to buy a major item’ sub-index surged by 26.7%. “Reduced concerns around health risks; the prospect of easing social restrictions and more certainty around incomes look to have had a direct impact here. The response suggests retailers can expect more foot traffic as restrictions ease although the overall level of the index still suggests most consumers will be looking to keep spending on a tight rein,” said Bill Evans, Chief Economist and Head of Research at Westpac.
This is in line with the ANZ-Roy Morgan Consumer Confidence Index, which has improved for the sixth consecutive week. However, it gained a mere 0.9% last week. The ‘time to buy a major household item’ gained 8.1%, while ‘current economic conditions’ rose by 1.7%.
“This gain likely reflects the continued good news on the path of the pandemic in Australia and the associated progressive easing of restrictions,” said David Plank, ANZ Head of Australian Economics. “The challenge for the coming week will be how households react to what is expected to be dire news on the state of the labour market.”
As more retailers reopen and the government forges ahead with its plan to ease restrictions, consumers will continue to return to brick-and-mortar stores, but a number of key players in the sector, such as Solomon Lew, have called for greater support from landlords.
“Landlords have a powerful role to play in the retail recovery and we are encouraging Landlords to come to the party with leasing relief for their tenants. Recovery is in everyone’s interests and there is a lot more that can be done to ease the financial pressure on tenants,” Zahra told ChannelNews.
The ARA has also stated that commercial landlords must do their part to ensure that malls are safe for customers and employees. “The top priority is to keep customers and staff safe as stores reopen – the last thing retailers need is a false start. We encourage everyone – retailers, shopping centres, and customers – to work together on this,” Zahra said.
Scentre Group said: “In Australia, 57% of retailers representing 70% of gross lettable area are open, with more retailers scheduled to reopen over the coming weeks. Based on the guidance from National Cabinet, we would anticipate the majority of the remaining stores will reopen soon.”
The ARA confirmed that most of its retail members were open or had plans to reopen in the next couple of weeks.