Loculyze have released the inaugural Retail Tracker | Prime report showing performance trends for the 12-months to October 2024. And its findings highlight an underlying shift in customer interactions with Australia's largest shopping centres in the wake of the April 2024 Bondi Junction attacks.
Retail Tracker | Prime is a complimentary monthly report available to our registered subscribers. It provides insights into customer engagement at Australian shopping centres with a gross lettable area exceeding 100,000 square meters. These 27 shopping centres play a significant role in the Australian retail sector, with nearly 1 in 2 Australian's visiting one of these malls over the course of a year. Monitoring the performance of these retail hubs is therefore essential for gaining insights into Australians' interactions with traditional retail spaces.
"Our analysis has revealed a marked change in behaviour across this asset class following the attacks at Bondi Junction in April 2024"
Since April 2024, Australia's biggest malls have experienced a sharp decline in how often customers will visit and how long they stay. During the 12-months to October 2024 customers made an average of 13.7 trips to these malls, down -9.3% from the 15.1 trips made during the 12-months to April 2024. Similarly, average dwell times have decreased from an average 56.5 minutes over the 12-months to April 2024 to 54.1 minutes in the 12-months to October 2024; a decline of -4.2% over this period.
This has led to total shopping hours falling from an average of 11.5 million per mall in the 12 months to April 2024 to 11.2 million in the 12 months to October 2024; a drop of -2.9%. This is a cause for concern because our models identify two key drivers of sales performance as the number of unique customers a shopping centre attracts and the amount of time these customers spend in the centre.
"This has lead to total shopping hours falling from an average of 11.5-million per mall in the 12-months to April 2024 to 11.2-million in the 12-months to October 2024"
It is far from doom and gloom however, in fact this asset class continues to go from strength to strength for two reasons:
Firstly, people are not staying away. There is a stream of new and returning customers which has driven average shopping trips per mall from 12.1-million in the 12-months to April 2024 to 12.3-million in the 12-months to October 2024, an increase of 1.4%. This influx of customers has also played a role in driving down the average frequency of visit, because for obvious reasons new customers have not visited as much as long standing ones.
Secondly, inflation is a great driver of sales growth. Our headline sales performance indicator, which layers in price and consumption changes on top of unique customers and dwell metrics, has risen 2.6% since April 2024 and remains 8.3% above the same period last year.
"the influx of customers and price inflation all point to a strong reporting season in the new year"
So the influx of customers and price inflation all point to a strong reporting season in the new year. Notwithstanding, there has been an undeniable shift of customer behaviour at these assets that will have detracted from growth.
In conclusion, the horrific events of April 2024 shocked Australia and continues to influence people's behaviour some 6-months later. This has lead to a more streamlined approach to shopping at Australia's biggest malls, with fewer and somewhat shorter shopping trips. October 2024 has shown some slowing of this trend with dwell times stabilising and the drop in average frequency of visit largely attributable to a high influx of customers. So we appear to be on a path to recovery, with perhaps our communities resilience and the onset of Christmas starting to turn the tide.
Despite these underlying changes, Australia's largest shopping centres have been buoyed by the growth in customers and price inflation to more than offset the decline in shopping hours. And, as shopping centre managers continue to install a sense of trust and security in their customers, and as time inevitably fades from the public consciousness the horrific events of April the13th 2024, these shopping centres are positioned to drive more growth from a return to normality.
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