The ‘David Jones effect': How have other retailers benefited?

  • News
  • August 31, 2016
  • Elly Strang
The ‘David Jones effect': How have other retailers benefited?

Topshop’s Queen St opening in March last year showed that when an international retailer first arrives in New Zealand, customers are excited enough to queue down the street.

Such is the effect of a brand-new player in the market.

It’s a safe assumption, then, to think that the swarms of shoppers being drawn to the brand-new store might start spending their dollars in shops in the surrounding area too.

So, how have the retailers surrounding David Jones fared?

Figures provided by Marketview show David Jones’ opening immediately gave retailers on Lambton Quay a significant boost in spending, shooting up 15.8 percent.

Spending then cooled off in the weeks following, but overall, Lambton Quay has enjoyed a 1.6 percent increase in spending over the past month.

The wider CBD hasn’t been as heavily influenced by its opening, as spending was only up 0.3 percent over the past month.

By the numbers – spending since David Jones opened:

Days 1-7 since opening:

Lambton stores: spending up 15.8 percent

Rest of CBD: spending up 3.5 percent

Days 8-25 since opening:

Lambton Stores: spending down 3.3 percent

Rest of CBD: spending down 0.8 percent

Combined days 1-25 since opening:

Lambton Stores: spending up 1.6 percent

Rest of CBD stores: spending up 0.3 percent

Source: Marketview

Meanwhile, Wellington’s OurCBD programme (made up of First Retail Group and Wellington City Council) has been working closely with David Jones senior managers and Wellington’s regional economic development agency to monitor the effects of its opening.

 On the Saturday following the store’s opening, 50 different nearby retailers were quizzed by about David Jones’ opening and whether it had a flow-on effect to their stores.

Results found:

1. All businesses reported a brisk first week with higher footfall than they had seen recently.

2. Most reported busier than usual days on either side of David Jones opening, with some sharing the buoyancy of opening day with strong sales and noticeably more customers through their doors.

3. Groups of people were found to be coming into town specifically to shop, such as customers that retailers hadn't seen for some time. Lots of people were coming into stores holding David Jones bags, showing it seems to have got people spending - and that's helping other retailers, too.

4. Wellington has remained busy since, with many consumers delaying their first visit till the crowds had died down.

First Retail Group managing director Chris Wilkinson says with other new store openings like Topshop and Wittner shoes due to open before Christmas, the spending momentum built by David Jones’ opening will continue to grow.

For now, customers are enjoying the new addition to Wellington’s retail sector – as well as the wider shopping area.

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