Retail in Fremantle Part 1. High Streets are Feeling Low – Fremantle and the global phenomenon

This is part one of a three part series on the future of Retail in Fremantle

As we despair at the number of empty shops in central Fremantle it is easy to think that what we see in Fremantle is a unique situation. The reality is that Freo’s high street challenges are just part of a global phenomenon from Rokeby Road Subiaco to Chapel St Melbourne to the UK. Our traditional high streets are struggling globally

A recent article in The Australian describes the “perfect storm” of circumstances that has led to the decline of main streets around Australia in the last decade arguing online retail, “…changes in the way we shop, problems with parking and traffic, greedy landlords, the global financial crisis as well as serious competition in the forms of Westfield shopping centres and the revitalisation of … inner-city retail precincts have all left their marks”.

Giving Oxford Street in Sydney and Chapel Street in Melbourne as examples the article goes on to say:

These retail strips were once the only destinations for designer and emerging apparel. On any given Saturday, you would be barely able to move for the crowds. Cars would crawl along Chapel Street as immaculately dressed shoppers ventured into boutique after boutique to browse and simply be seen. At Paddington Markets on Oxford Street, Australian designers … were found selling their creations long before they became household names.

Today it could hardly be more different. Oxford Street is blighted by dozens of vacant, ageing shops baring ugly, depressing for lease signs, each seemingly bigger than the last, all desperate for attention. … Anecdotally, some parts of Oxford Strret have a vacancy rate of up to 50 per cent.

It is a similar story for Chapel Street in Melbourne. Jim Pothitos president of the Chapel Street Precinct Association say “I know for a fact that there are probably 50 shops that are vacant and that is just between Commercial Road and the river — it’s not a good look.”

Similarly Bridge Road, Richmond, a once a tightly held strip of discount clothing outlets and cheap cafes, where the vacancy rate has risen to almost 20 per cent – an alarming one in five shops.

Melbourne’s retail-strip vacancy rate has increased to almost 8 per cent. In Adelaide, the vacancy rate on King ­William Road, a strip with a mix of fashion tenants and cafes, is approaching 9 per cent. In the UK one in every eight shops in Britain now boarded up

Coming back to WA Subiaco retailers are saying it is the worst it has ever been and Fremantle is also clearly doing it tough with the High Street Mall especially struggling with a large numbers of vacancies.

The Australia Financial Review described this widespread challenge high street retailers are battling the threefold threat of, one, rising rents, two, competition from malls and, three, the capacity of online and offshore retailers to sell for lower prices.

High rents

Landlords didn’t want to drop their rents. Given the history of the street, they thought someone would come along soon, but many are still waiting…Now they have dropped the rent but it doesn’t matter. You could charge $1 a week and still no one would come because the shops are falling apart because the landlords haven’t spent anything on the properties for the past 25 years. It is that [landlord] shallow-mindedness that is creating the issues.”

You hear similar thing said in Fremantle but this quote is from Oxford Street Sydney which today suffers from the high-rent plague and is littered with empty stores,

The glory days of high rents are gone but many landlords around the country are still adjusting their mindset to the new reality . “Oxford and Chapel streets represent the high point of retail strips – when walking up and down the streets was the go – and that was in about the year 2000,’’ says Malcolm Gunning, president of the Real Estate Institute of NSW

Online

According to NAB and Quantium, online retail sales increase 11.3% to $14.9 billion in past year and if Australia’s top 15 online retailers were combined, they’d be larger than Myer and David Jones.

While online retail makes up currently just under 6% of retail sales in Australia but is rapidly growing and undermining the old business model of high streets.

growth in online salesShopping Mall competition

In most cities shopping malls are the magnet that is over turning high streets. Shopping centres can control their retail mix and can match ­complementary outlets to draw interested foot traffic.

Melbourne’s Emporium, Chadstone and Bourke Street Mall, as well as Bondi Junction and Pitt Street Mall in Sydney, have vacuumed more stores off the high streets through expansions and incentives.

This is also true in Perth with the CBD, Claremont Quarter and the growth in Garden City challenging established centres like Subiaco and Fremantle   As an experienced Perth landlord recently wrote to me “shopping malls with a diversified offer, free parking, and a controlled environment with security and no beggars is clearly attracting a majority of the people”.

Conclusion

These are clearly tough times for high street retailers from Fremantle to Stockton-on-Tees but I have to agree with Mary Portas (author of the Portas review on high streets in the UK) who says “… High Streets are not dead. Regardless of what the doom-mongers say about the inevitability of “Big Box” retailing or the convenience and simplicity of the internet, High Streets will thrive if we re-imagine them”.

In part two I will examine how we might best re-image our high streets and rebuild retail.

About Mayor of Fremantle Brad Pettitt's blog
City of Fremantle Mayor

6 Responses to Retail in Fremantle Part 1. High Streets are Feeling Low – Fremantle and the global phenomenon

  1. Thoughtful article, Brad.

    I agree too with Portas. High Streets provide an excellent skeleton for future use. I think one of the big things that High Streets will be able to take advantage of is the rapid increase in the use of personal services.

    It’s something of a paradoxical reality that buying something from an online shop based thousands of miles away in the USA is more accessible and convenient than trying to find a similar item fromo a shop down the road in Freo. Ultimately, I think one of the biggest issues is that there is a larger information gap for local high streets, than exists in the information overload of online shopping. It is harder to conveniently find what you want in the place a couple kilometres down the road, than a virtual shop 2000 miles away.

    There will come a time where the Internet will be facilitating the local economy. This has already started happening in Freo with a number of blogs, the Freo Story site and the good use of FB by some businesses. However, this will need to reach a critical masses of use by local businesses to create an network of information that’s valuable to users. This would include things like new discounts, new product lines, other social media contributions.

    The future of Internet is in curation. If Freo’s shops and Council continue to develop their ability to curate all of this various information so that it is attractive and accessible, the local economy can better compete with the accessibility of online shopping.

    Cheers,
    Michael McPhail

  2. SueBennett-ng says:

    In re imagining dont Forget access and parking!!….ie why do the malls thrive?

    • freoishome says:

      Parking isn’t the issue. Galleria and Fremantle CBD are about the same land area. Yet shoppers in Galleria will walk throughout the entire Mall without complaint, ie, kms, but whinge about walking the same distance in freo. Is it all about the mindset of guests to Galleria and Fremantle. Galleria feels more walkable; everyone else is doing it, you can’t see cars, you don’t have to look out for them. We need to close the entire freo west end during social hours to motor traffic, except emergency vehicles; it is worth experimenting.
      Paul

  3. spencertive says:

    … and re imagine them how? And again, re imagine them how if the landlords aren’t willing to change? Look forward to the next posts mate…

  4. freoview says:

    Yes too true, Brad, but now we need to “re-imagine” redefine and re-create our new high streets. We need to learn the lessons and one of them is that rental return should not dictate the value of a property, because if it does, landlords will continue to demand high rents and that is not sustainable for small business operators.

    Roel Loopers

  5. Mool says:

    Thanks Brad, at least the problem is being acknowledged. However, the small retailers on these streets need urgent solutions and can’t wait for “imaginative imaginations” likely to come true in half a decade or even more. As an instant solution or help, parking needs to be addressed. If a city is getting poorer, the poverty needs to be shared by businesses and authorities alike. The best way to get rents to a rational level is allow tenants to get out of lease in case they are running in losses. The landlords are safe from all losses once they are able to get a lease from a new, enthusiastic tenant who in turn gets stuck at least for five years.

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