It’s a big call about big space.
Shoppers might be voting with their feet over the price, quality and variety of the Woolworth’s food and grocery range, but Australia’s peak lobby group for property developers, Urban Taskforce, has a very different take on what the real problem eating out the Fresh Food People’s profit margins is: the government, and the paucity of store locations in New South Wales available for the struggling Masters Home Improvement business.
It's good to know someone has sympathy.
Just as Woolworths' chief executive Grant O'Brien fell on his sword this week after another profit downgrade, the property development industry has weighed-in and claimed that retailers like Woollies and Masters are suffering because of the the dead hand of government — especially in the Premier State where Urban Taskforce claims current planning and zoning system hasn't just slowed down the roll out off huge new megastores, it's also choked the availability of new sites and is hindering customer access and creating traffic snarls.
They clearly have more sympathy than shareholders or councils.
“Behind the current financial concerns affecting retail company Woolworths are planning issues that have limited where new retail outlets can be located,’ Urban Taskforce chief executive, Chris Johnson said.
“Due to the restrictive land use zones of the NSW planning system, there is an undersupply of appropriately zoned land to accommodate stores with a large floor plate, such as Masters. This is leading to a restriction on the location of outlets therefore reducing customer access. These restrictions are only leading to more car usage across metropolitan Sydney as customers have to travel longer distances to purchase goods.”
The ‘car park crush’ argument may have some merit, but it also highlights a little known and highly speculative business line that retailers like Woolworths have previously been highly proficient in: land banking. Read more.