Change and the role of management in retail

  • Property
  • June 3, 2015
  • Paul Keane
Change and the role of management in retail

A recent article in the NBR had a headline that suggested there was an exodus from Tauranga’s CBD in favour of new developments, driven by changing consumer habits. This conjured up our thinking as to retail growth and conflict or attrition of the CBD, and of course ‘change’.

How Tauranga’s retail environment is changing

Without question, Tauranga has been a good option for people wanting to exit other major cities for a long time. However, the “exodus” statement relative to the Tauranga CBD is a bit of an exaggeration in my view.

Pockets of new retail growth

Tauranga has new retail growth through the development of the proposed Tauranga Crossing development at Tauriko, and more leasing of converted space at Bethlehem Shopping Centre. Of course, both developments will encourage new retailers to enter the market or existing local retailers to expand. Examples of the latter are Kmart opening in Bethlehem, and Countdown and The Warehouse opening in Tauranga Crossing.

Why the CBD has struggled

The fact that these pockets are emerging comes as no surprise, it had to happen and is something RCG has predicted for a few years now. Further, Tauranga’s CBD has been under threat for years. It offers little in terms of significant retail activity and is predominantly a food and beverage location. Having said that there are still some very good retailers in the CBD; the problem is that they are dispersed. Consumers want to visit an all-encompassing retail environment, not haphazard locations.

Together with population growth, the city needs more of the clusters, hence the development of Tauriko and the improvements to Bethlehem. A few years ago when this company on behalf of an investor developed Fraser Cove, the local council were concerned at the threat to the CBD. Nothing has ‘changed’, but shouldn’t councils make an effort to get the CBD working?

How centre management has changed

Talking about change and extending the discussion a little. Some 45 years ago, I started in the shopping centre industry. I was certainly one of the first and youngest shopping centre managers to enter the industry at the time. People around then such as Phil Wallace, the centre manager of Riccarton, have long passed – but they were true identities, and respected in that fledging industry.

A shopping centre manager’s role was all-encompassing, responsible for rent collection; tenant communication; rent reviews and renewals; percentage rent calculations; retail growth performance graphs, marketing, cleaning; security etc. Staff were minimal and the effort was significant. Since then the industry has evolved.

There are significant numbers of employees now in shopping centres, carrying out different roles, and there is far less focus on tenant relationships. That in my view is for the worse.  Understanding retailer functions and their trading performance is a key to success. The problem is that few managers actually talk to retailers as to their respective trading performances etc.

Guidance and support, crucial to management

On a personal note, this week I want to just talk about change just a little more. Those of us who are parents, always want to see their children and grandchildren work hard and succeed. My eldest daughter has been the executive producer for some years of Campbell Live, which finished on TV3 last week. 

I have been privy to the hard work that journalists undertake, including of course the stress that goes with any high powered job, particularly current affairs. In daily business life, we are all faced with issues which relate to making hard decisions. However, I was confused that an employer could place its employees in a position of uncertainty whilst they publicly consider and defer decisions which impact on the employees’ lives and expectations.

How can people be expected to work hard and produce results under such circumstances? Those of us who are captains of industry should remember that change is an emotional event. Change needs guidance and support. Isn’t that what management is all about, whether it be shopping centres or media?

  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.

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