ARE SHOPPING CENTRES DEAD?

The competition from online retail is real. Online retail sales have been growing over the past 10 years, and while it has come back from the highs during COVID-19, it still remains an active segment of the market which is highlighted by the increased needs in industrial logistics and storage accommodation. This increase is most sizable in the non-food segments which is echoed by the reduced footprint of clothing and soft goods, and department stores across brick and mortar retail premises. Over the last year, non-food online retailing accounts for 16.5 per cent of all retail sales while food represents just 5.6 per cent after peaking at 7.4 per cent during the pandemic.

With a total 10.3 per cent of all retail sales being online, and this low food segment (which is our largest retail consumable), the ongoing need for brick and mortar retailers, particularly in the food sector, will ensure the continued need for shopping centres anchored by supermarkets. So shopping centres are not dead, however, the tenant types which occupy brick and mortar retail are certainly changing, with a greater weighting to food and service type industries.