World Economy

Australian Malls Turn to Village Life

Australian Malls Turn to Village LifeAustralian Malls Turn to Village Life

As Australia’s local merchants struggle with an influx of global names, leading malls are considering returning to their village center roots to woo new tenants by moving away from shops and offering medical facilities, more restaurants and even amusement parks.

Several top retailers have recently succumbed to pressure from foreign giants such as Japan’s Uniqlo and Sephora of France and with Amazon plotting its debut in the country, the future looks tough, AFP reported.

The response from developers has been to redefine the mall away from a “shopping” focus to become a more community-driven service and entertainment space. While cafes and restaurants have long helped attract shoppers to malls, they are now filling shopping centers, providing some buzz even as an eerie quiet fills some nearby clothing stores.

With the big global names pouring huge sums of cash into the country, once popular clothing chains such as David Lawrence, Pumpkin Patch, Herringbone, and Rhodes & Beckett have bitten the dust, while others scramble to reduce costs.

This has included cutting back on bricks and mortar stores, and steering center owners toward food, entertainment, health care and childcare providers.

Major landlords such as Vicinity and Westfield spin-off Scenter, which this year have seen their share prices slip to one or two-year lows, are already redeveloping their arcades. Vicinity’s Chadstone Shopping Center in Melbourne, Australia’s largest mall, is now the site of the southern hemisphere’s first massive amusement park Legoland.

The company is also tapping into newer technologies such as facial recognition to identify consumers through their age and gender and analyze their shopping habits. “What we are seeing is the malls starting to pivot away from commodity-type products... toward retailers that offer a service which isn’t physical,” real estate firm Cushman & Wakefield’s retail investments head Nick Potter told AFP.

“Shopping centers are the modern village, it’s where everyone comes together. These centers are typically located in the center of towns, they’ve got strong infrastructure... and that offers up the ability to move with the times.”

Adding to the shift is the growth of online shopping, which offers shoppers the same options but with the added bonus of not being subject to general sales tax for anything below Aus$1,000 ($760).

Canberra has sought to end the loophole by imposing a 10% levy from next July but the lower margins for online store such as eBay and ASOS still makes them attractive.



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