How much we’re spending in huge shopping centres revealed

The rankings this year feature 91 centres, of which 85 per cent significantly increased their annual turnover.

The other 15 per cent either maintained 2020 levels or showed minor falls. The centres ranked account for an annual $54 billion in retail sales.

‘It’s not widely known outside shopping centre circles, but the Australian shopping centre industry is the world leader.’

Retail industry expert Michael Lloyd

According to industry expert and SCN’s publisher, Michael Lloyd, Australian shopping centres are the most “sophisticated in the world and the shopping centre industry leads the world in the development, management and marketing of its product.”

“The figures are testimony to the professionalism and expertise of those developing and managing these centres,” Lloyd said.

“It’s not widely known outside shopping centre circles, but the Australian shopping centre industry is the world leader, and not by a short head either, but by several lengths.”

But amid the high traffic at the centres, the retail sector is facing significant headwinds from rising interest rates, a wary consumer, and for landlords, potential falls in property values.

In the latest edition of Deloitte Access Economics’ quarterly Retail Forecasts report, it forecasts two “futures” for Australia’s retailers.

Deloitte Access Economics partner David Rumbens said, the first is here and now – and one where consumer sentiment is weak and retail sales in real terms are going backwards.

“The other future is a brighter one, where migrants and tourists are back in big numbers and consumers have regained spending power. That future is not now, but it may emerge as soon as the end of 2023,” Rumbens said.

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“What was seen as a risk to retail sales in the first half of 2023 became a reality for retailers in the December quarter of 2022.”

He said the market is entering a period where higher interest rates will take a chunk more out of disposable incomes for consumers and increase the proportion of mortgage holders at risk of mortgage stress.

Morningstar’s analyst Johannes Faul also expects non-essential goods demand to deteriorate through 2023 as still-elevated goods consumption structurally reverts to pre-COVID-19 norms.

He said the rising living costs will hit nonessential spending and potentially higher unemployment is also a risk for spending to further weaken.

Faul said unusually high food price inflation has helped the two supermarket majors, which are key anchors in malls, expand gross profit margins, “but at the cost of market share”.

“We see a risk that discounters and independents grab more market share and reverse recent margin gains,” he said.

SCN’s rankings are not just confined to a centre’s annual turnover but also measure the effectiveness and performance of each shopping centre in terms of its turnover per square metre, which is total turnover of the centre divided by the total area of all retail.

Mirvac and Perron’s Broadway Sydney shopping centre took the top honours with $16,272 per square metre, the first to ever top the $16,000 per square metre level. Chadstone took the second spot with $15,698 pr square metre, up 18 pr cent on 2020.

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