Greed killing the shopping centre?

[davidc4430]

Retail rents squeeze small stores out of shopping centres

https://www.abc.net.au/news/2020-02-20/retail-rents-squeeze-small-shops-out-of-shopping-centres/1198...

when i was young if you wanted to go to the big stores you went to 'town' on the bus

then drove into town in your nice car, and parked for free!

then the city got greedy, started chaging for parking.

people began moving their shopping to the  new satelite shoping places like Westfields

same stores and free parking again.

in recent times these satelite shopping centres have been going down the same greed path as the city did

placing restrictions on parking with some now charging for parking.

also raising rents to the stores to the point they were going broke.

now you walk through these centres and see multiple empty spaces.

i asume as no one rents these spaces those remaining get a rent hike to cover the losses.

my very local all new all singing shopping centre that promised a nice Foodland store plus a group of 'specialty' stores, has in the 5 years its been open never fully occupied.

most of the 'speacialty stores' have never materialized

i bet the rent is a major hold back

[chameleon54]

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@eol-products wrote:

Negative gearing is popular with residential property not sure how it would work with commercial properties though. Commercial properties are mostly sold with a postive return and the better the return the more you pay for them. 

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I think you are right. I have been scratching my head trying to think what angle an investor could play with vacant commercial property and cant think of anything unless the commercial property market was rising in value rapidly. That aint happening at the moment and doesn't look like happening anytime soon.

As for why B & M stores are shutting, the stagnant economy and weak consumer sentiment would almost certainly be the biggest factor, but wage demands including the ridiculous penalty rates imposed by Labor several years ago would also be having an effect. This is particularly pertinent to those in the resturaunt and dining trade where most of the business is out of " normal " hours, which coincides with the extreme penalty rates.

Like Holdens its just another example of where employees and unions have simply priced themselves out of a job making the business unviable. This has resulted in increased casualisation, shorter, more unstable working hours and more businesses simply closing their doors. I,m one who has run small B & M busineses for around 25 years employing a number of people. I have decided I wont continue employing people as it has simply become too expensive and difficult meeting the constantly increasing demands of unions and the associated red tape that goes along with it. The red tape is strangling the small business employment market just as much as unrealistic wage demands.

People find it difficult to accept, but with Australia's population rising due to endless immigration, its intrinsic wealth of mining and agricultural products is spread too thinly to sustain the standard of living we have come to expect. This is particularly true when we have a large, unproductive, bloated public service as we currently have.

Sorry to be the bearer of bad news, but wages will continue to stagnate and standard of living will slowly fall until we reach a level where people are paid what they are actually worth in a globally focussed economy.

[martinw-48]

Chamo, you're a bit behind mate.
Penalty rates for the hospitality industry and the like have been eliminated by the Coalition

[eol-products]

In the US you could use empty shops as a bargaining chip to negotiate better terms from your lender but in Australia you can't walk away from a loan. My guess is an empty shop may not be the best look but having small businesses opening and closing isn't either. 

With many businesses that have been around for years closing it makes you realise retail is changing and keeping up may not be enough in the future. Makes ebay an easy platform to sell as the onus is on ebay to keep the platform viable for the future and adjust to what the market wants. An ebay seller only has to find the right product to be successful compared to a retail shop that has to find the location and customer as well.

[martinw-48]

Holden ended manufacturing in 2017.
B and M's are closing down because we don't have the money to spend because wages aren't going up.

Experts keep saying that the besy way to boost the economy is to raise Newstart because they spend every cent.

CEO's renumeration and wages of top executives hasn't been stagnant.

[chameleon54]

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@martinw-48 wrote:
Holden ended manufacturing in 2017.
B and M's are closing down because we don't have the money to spend because wages aren't going up.

Experts keep saying that the besy way to boost the economy is to raise Newstart because they spend every cent.

CEO's renumeration and wages of top executives hasn't been stagnant.

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I suspect at the moment increasing newstart would be an effective way to stimulate the economy. The reason wages are not going up, is because Australia has been living high on the hog of mining and agriculture for decades ( the lucky country ) but this wealth is now spread over too many people due to immigration. Workers now need to rely on what they actually produce to pay for their wages. 

If you don't believe me, think back to when Australia was last prosperous with rising wages, lots of new cars in the driveway etc. It was in the Howard era when China was initiating its transformation. China was buying up our raw materials in a big way, paying huge amounts for iron ore etc. The Howard government received large windfalls in tax which it passed onto the public through middle class welfare and saved through budget surplusses. Things where rosy and this period of prosperity only ended when the global financial crisis came along, forcing Labor to blow the savings to get us through ( something I support by the way before all the usuals jump up and down ) . 

Basically it was the last time Australians had the opportunity to bludge off of our Mining and Agricultural exports. Sorry, but workers have to pay their own way now, earning income based on what they are really worth, not what other industries can provide for them. And unfortunately that's a lot less than many have become accustomed too.

[icyfroth]

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@chameleon54 wrote:

---

@eol-products wrote:

Negative gearing is popular with residential property not sure how it would work with commercial properties though. Commercial properties are mostly sold with a postive return and the better the return the more you pay for them. 

---

I think you are right. I have been scratching my head trying to think what angle an investor could play with vacant commercial property and cant think of anything unless the commercial property market was rising in value rapidly. That aint happening at the moment and doesn't look like happening anytime soon.

As for why B & M stores are shutting, the stagnant economy and weak consumer sentiment would almost certainly be the biggest factor, but wage demands including the ridiculous penalty rates imposed by Labor several years ago would also be having an effect. This is particularly pertinent to those in the resturaunt and dining trade where most of the business is out of " normal " hours, which coincides with the extreme penalty rates.

Like Holdens its just another example of where employees and unions have simply priced themselves out of a job making the business unviable. This has resulted in increased casualisation, shorter, more unstable working hours and more businesses simply closing their doors. I,m one who has run small B & M busineses for around 25 years employing a number of people. I have decided I wont continue employing people as it has simply become too expensive and difficult meeting the constantly increasing demands of unions and the associated red tape that goes along with it. The red tape is strangling the small business employment market just as much as unrealistic wage demands.

People find it difficult to accept, but with Australia's population rising due to endless immigration, its intrinsic wealth of mining and agricultural products is spread too thinly to sustain the standard of living we have come to expect. This is particularly true when we have a large, unproductive, bloated public service as we currently have.

Sorry to be the bearer of bad news, but wages will continue to stagnate and standard of living will slowly fall until we reach a level where people are paid what they are actually worth in a globally focussed economy.

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Yep. Payroll tax, superannuation payments, paid maternity and paternity leave etc.

[davidc4430]

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@martinw-48 wrote:
Holden ended manufacturing in 2017.
B and M's are closing down because we don't have the money to spend because wages aren't going up.

Experts keep saying that the besy way to boost the economy is to raise Newstart because they spend every cent.

CEO's renumeration and wages of top executives hasn't been stagnant.

---

i dont buy much but i find usually i can find what i want online and delivered to my door cheaper than going to a B&M store.

i think thats whats killing B&M stores.

people browsing doesnt put money in the till.

if you know what you want you just search online.

and most online sellers offer return options too.

even when i buy clothes from say target, i shop online and wait for an email to say come pick it up for free

or if i spend over x $s delivery is free

[martinw-48]

Most countries that are resource rich share the wealth with their population.
Our resources make other countries rich

[chameleon54]

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@martinw-48 wrote:
Most countries that are resource rich share the wealth with their population.
Our resources make other countries rich

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That's another very important part of the problem. Australians have become accustomed to a very high standard of living based on our natural resources, but as our population has expanded due to the immigration policies of successive governments, there is no longer enough income generated to sustain the living standards. The public is getting restless and whinging about low wage rises, falling real incomes etc. and the only way governments can appease them and keep living standards up is to allow foreigners to actually buy the mines, farms and businesses that have been supplying our wealth and borrowing money from overseas.. 

The more farms, mines and iconic brands that are sold OS the less money available for Australians. the future is looking truly bleak for Australian living standards.

[myoclon1cjerk]

https://www.theguardian.com/commentisfree/2014/sep/04/oil-tax-norway-could-teach-australia-a-thing-o...