COVID-19: The Future of Cities and Urban Living
Creativity and collaboration needed to lift retail consumption in a post-COVID-19 world
Paul J. Maginn and Paul Drechsler
Paul Maginn and Paul Drechsler take a closer look at some of implications of COVID-19 for retailing – both as an employment sector and as an integral element of urban life. Among other things, they highlight the acceleration of the move towards online retailing and the emergence of the suburbs as new epicentres of productivity and consumption.
Retailing: more than just consumption
Retailing is a much overlooked area of scholarly geographical and planning analysis in Australia.
This is somewhat curious given the role retailing plays as an economic activity, a form of employment, a land-use and mode of property development, and a space of consumption, leisure and social interaction.
It might surprise many people to know retailing is one of the largest employment sectors in Australia. The 2016 Census showed almost 1.1 million people, 10 per cent of the workforce, were employed in retailing. More recent Labour Force data shows some 1,256,500 people were employed in retailing as of February 2020.
Nationally, retailing is the largest employment sector after healthcare and social assistance, which employs 12.6 per cent of the workforce. In Western Australia, retailing employs just over 110,000 people, with 81 per cent of retail jobs within the Greater Perth metropolitan region. It is the third largest employment sector (9.5 per cent) within the state, behind healthcare (11.7 per cent) and construction (9.9 per cent).
According to the Department of Planning, Lands and Heritage’s 2017 Land Use and Employment Survey [PDF, 1.8MB], the Perth and Peel regions comprise almost 50 million square metres of floor space across a diverse range of built land-uses. Total shop and retail floor space amounts to 5,169,700m2. This is equivalent to 241 Optus Stadiums.
Whatever happened to bricks and mortar retailing?
It is clear that over the last five years or so, bricks and mortar retailing, especially high street-based retailers, have endured increasingly stiff competition due to the rise of online retailing. The COVID-19 pandemic has only added to the economic woes of the bricks and mortar retail sector. Moreover, as many shops, cafés, bars, restaurants and other businesses on high streets, shopping centres and entertainments precincts across Australia have had to close as a result of social distancing restrictions due to COVID-19, this has severely disrupted urban vibrancy, public life and social interaction.
Major retail and entertainment precincts such as Murray Street, Hay Street, St. Georges Terrace, Yagan Square and Elizabeth Quay in the CBD, High Street and South Terrace in Fremantle, Northbridge (Perth), Leederville and Beaufort Street (Vincent), Albany Highway (Victoria Park) and Rokeby Road (Subiaco) have resembled ghost towns at times.
Recent research by Damian Stone from Y Research found that just 37.2% of shops in 23 of Western Australia’s largest shopping centres and retail strips are currently trading. Shopping centres were found to be performing relatively better than retail strips. That said, there was considerable variability in the proportion of shops open in several major shopping centres – only 25-30% of shops were open in Westfield’s Whitford City and Booragoon, and Karrinyup Shopping Centre.
The cautious consumer
The most recent retail trade data from the ABS highlights that seasonally adjusted retail turnover plummeted by 17.7% during April – the second full month of COVID-19. Decline in turnover was greatest within the clothing/footwear/personal accessories and cafés/restaurant/fast food sectors, which fell by 53.6% and 35.4% respectively. In fact, month-on-month turnover in clothing/footwear/personal accessories has essentially been in negative territory since September 2019; it fell dramatically in March (-22.6 per cent) when COVID-19 restrictions were rolled out.
This five- to six-month run of people reining in their discretionary spending on clothing, footwear and personal accessories can be viewed as the early warning signs of the recession that we now find ourselves in. COVID-19 merely sped up the inevitable.