Ed Donald is a senior retail consultant with Bayleys. He shares his thoughts on the biggest successes of 2015, and what to expect for 2016.
1. Who’s your pick for retail “personality” of the year? Who’s someone who stood out and made some bold and smart moves?
Briscoe Group managing director Rod Duke has been a standout performer in 2015, in my view. Throughout the GFC he has managed to increase Briscoes’ market share and he’s been consistent in getting a good return for his shareholders. Through a very difficult time, Rod has grown his business, which is not an easy thing to do. He’s achieved this by interacting with his customers through fairly aggressive marketing and has kept good controls in his business such as not blowing out his overheads. Briscoes is a retail business run by retailers, which is why they have been so successful.
2. Which retail company stood out in 2015?
The Melba Group, which owns Auckland-based Café Melba, Frolic Café, the Lodge Café, Bread & Butter Bakery and Five Elements Espresso, has ben a stand-out business in 2015. Jens Dalhoff and his business partner Shawn Pope have created very edgy, individualised cafes which offer quality food and beverages and distinctive fit-outs which are spot on. The company also proudly roasts its own coffee in New Zealand, which is featured in every café and give the group total control over the entire process. While each café business is independent and individual, they all subscribe to the same ethos of quality and service. You can feel the staff care and have an interest in the business. It all translates into a bloody good experience. They are food and beverage people with a business slant and are looking to expand. They’re my pick for 2015.
3. Who are some ones to watch in 2016?
The ones to watch are the giants that are coming, such as H&M, Zara, and Uniqlo. They are going to have a huge impact on and it’s going to change our retail landscape. To make room for the giants, some strong New Zealand brands are being exited from shopping centres. They’re a huge drawcard but they’re also huge competition for our local brands.
4. Who are some great smaller town or regional retailers who punched above their weight?
Botswana Butchery is a great example of a regional success story that is punching above its weight. This business was a small town player that came out of Queenstown and Wanaka and took on the big smoke. They took over the waterfront site of former Cin Cin, within the Ferry building on Quay Street. Since then, the restaurant has become a popular and highly-regarded business. They’re winning and they’re looking to expand.
5. What property area in New Zealand was the most interesting and dynamic for retail and why?
The most interesting and dynamic area for 2016 has been the resurgence of Auckland’s CBD - specifically lower Queen St. Gucci, Topshop and Prada have already opened and a lot more are coming. This was the biggest game changer for 2015 and will continue to be into 2016 and beyond. This precinct has the ability to generate more foot traffic than anywhere else in New Zealand. Lambton Quay in Wellington is close behind in terms of becoming one of the most dynamic and interesting retail areas in the country. Australian retail giant David Jones is due to open in the former high-profile Kirkcaldie and Stains premise, which will undoubtedly see other retailers soon follow suit by moving into the area.
6. What issues and ideas should retailers have at the front of their mind for 2016?
The world is a changing place. New Zealanders and New Zealand retailers like the rest of the world are faced with deflation so our costs, such as overheads, have to shrink with it to make business viable. Retailers have to protect their margins. One way this can be achieved is through rental costs being reduced. As a landlord, you’re in a partnership with your tenant and those who view it as such will win. Another issue for New Zealand brands is competing with the giant retailers moving here, who have the ability to produce quality, fast fashion and turn it around so it’s available in stores extremely quickly. A further aspect retails need to have top of mind in 2016 and beyond is the changing demographic of our cities. Our kids are buying apartments because they can’t afford to live in the suburbs. So the way people are living and shopping in those areas is changing. In terms of retail offerings, something will have to fill the void on the city fringe. The ‘veins’ around where people live and work in these areas - where they walk and cycle - will become our new retail strips, right on their doorstep.