Last week one of our team of professionals - our technical manager, Nick Ogg - reached 10 years of service. We appropriately honoured that achievement. An achievement it was, 10 years serving one company is an exceptional effort.
However, it made us think about the last 10 years and what the next 10 years will bring. It’s easy to reflect, but very hard to predict, as we all know.
Retail in the past 10 years
The past 10 years, really haven’t seen a great deal of change in the retail sector. Most of the major retailers in this country have survived, albeit with some difficulty at times. Some significant commentary has reflected on the impact from online retailing versus bricks and mortar, and whilst this has impacted, the impact has been less that what we may have thought to have been the case 10 years ago. In fact to some extent, the threat has made certain retailers more aware and encouraged their own online retailing which has certainly helped most.
Books One of the biggest impacts has been in the book and stationary business where there have been a number of closures and the remaining book shops as such have changed their merchandising methods to meet the challenges that exist. No longer can a ‘book shop’ exist just selling books.
Footwear Some footwear retailers have also closed simply because of the price competitiveness from larger retailers, such as Number One Shoes. The likes of Hannah’s as a family footwear store is an example of how the mighty can decline. No longer does it dominate the industry as it did 10 years ago.
The Global Financial Crisis The GFC was probably the biggest single factor over the past 10 years. It hit the world economy very hard from 2007, to about 2012 when things started to improve. Whilst we have a “rock star” economy, we certainly were impacted and we suffered from a sharp decline in business. Work was harder to get and what kept most people “sane” was past reputations. Consumers during this period were very reluctant to spend due to employment uncertainty and all Retailers suffered as a result.
Ironically, the Briscoe’s Group survived best during this period when they seemed to have less discounting periods and instead focused on profit. That has proven to be very successful for them, as demonstrated by their profit results.
Retailing in 2025
Despite the predictions of doom and gloom for bricks and mortar retailers, we don’t necessarily share that view. As people age, they will age with the knowledge that they have at the time. For example, most current generations will have a good understanding of the internet and the use of technology. As they leave the workforce that knowledge will diminish. Therefore, they will want social communication through leisure and shopping activities. Therefore the need for bricks and mortar will be very apparent and in demand.
Retailers aside, the food and beverage business should continue to prosper. 10 years is not really a long time. However if you add 10 years to your current age, contemplate what you will be doing then and what you will look like in 2025, that should give you an idea of what the future holds.
Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils.
This post originally appeared on RCG's blog.