Regional Australia has proven to be a safer place too live and work as COVID-19 has wreaked its havoc here and around the world.
Higher population density has been shown to have its disadvantages. Large offices and busy workplaces, too.
People have learned to work from home. Businesses have adjusted – what was not an option in 2019 is commonplace in 2020.
I suspect that some, maybe plenty, of the changes implemented for the short term earlier this year will stick, that regional Australia will remain appealing for families, and for businesses. Indeed, that appeal could grow.
Business owners I have spoken with are reassessing their need to bring people to an office for 8 hours to work when productivity can be as good, or better with folks working from home. On top of the commute time saving, there is a cost saving – to individuals and business.
In this evolving world we will see new businesses spring up, serving people working regionally who need an office, but maybe only for a few hours a week.
On the issue of offices, small to medium sized business owners I talk with are all considering their on-going city based infrastructure needs – office space, workstations, big photocopiers and more. There could be savings, too, from less of a need for company vehicles. It is easy to cost the benefit of retreating from this as the costs of the central office are well known.
In all of this there are opportunities for retailers and local, regional, service providers. This is where local regional newsagents can play a role – as suppliers of more stationery for people working from home and businesses re-locating regionally, as providers of services in support of these situations and, for some, as providers of shared workspaces where people need an office or more privacy than home offers.
COVID-19 has shown us the extent to which people and businesses can and will change for a healthier situation. Regional Australia is well placed to serve in this situation.
I think it is safe for regionally located businesses to invest time in working on leveraging the opportunities uncovered. If my retail businesses were regional, this is what I would be doing. I would be looking to serve the needs of individuals and businesses through providing short-term office rental, easy access to supplies and easy access to business support services.
COVID-19 has shown us all how to transact business differently. Smart businesses have embraced those changes and done so in a way that offers employees a healthier and more enjoyable work life.
Forward thinking newsagents and others are already embracing the opportunities revealed in 2020.
Regional towns and their retail stores are also beneficiaries of the international border closures with many city people now holidaying at home. The overseas travel dollar that we used to export is now flowing to many regional towns.
Steve, So true in many coastal and well known Country Towns. I was in Bowral last week (packed to the rafters) and have had similar reports from other Towns However, it’s not a majority although the rest are sustaining normality.
There still is the “local” economy that sustains the Town and Regionand much f that has been under strain through natural and other disasters such as rain, flooding, bush fires (the latter a lot lit by humans and some lightening strikes as well) plusan aging population content increasing in volume with much less spending power.
All in all a much better result and great to see those especially the Coastal Towns at lat get their accommodation filling up again.
Incidently the Bowral number 2 shop nearest the P.O. closed after being there forever. The store is guttered and I expect Lotto to reappear close by soon. Camerons the now only and much larger one of the two still trading very well by observation.
We are in a country town just a one hour drive from Adelaide’s CBD ,trading since March has been solid with increases in all departments including magazines.
However as mentioned previously there are many external factors at play.
The huge amount of Government money pumped into the economy via Job Keeper and Job Seeker ect is not sustainable and once those programs are wound back i fear we will be facing an economic sunamai .
I fear for those retailers who are located in large metropolitan shopping centres. Generally shopping centre management have been pretty ruthless with retailers and they have been able to play hard ball purely because of supply and demand , that is if a retailer falls over there has always been another willing to take there place.
But that has now changed probably forever.
Most of the large shopping centre’s are corporate owned and it appears some are refusing to accept reality and either won’t or cannot change their business model , instead continuing with business practices which worked in a different economic enviorment.
Shopping center middle management are driven by a set of KPIs they have to achieve and the pressure applied from above to meet board expectations is intense. The problem is those KPIs are now unrealistic and the suits don’t understand the dynamics of retail. Empty shops means less choice for customers which the end point is lees foot traffic in large shopping centers .
I hear the argument that shopping centers have fixed overheads that have to be met, but so do retailers . If large center landlords do not or will not accept change, this will not end well for them.
Retailers have come and gone in large centers since the shopping mall was conceived, for a variety of reasons with many loosing everything.
But now it’s different with the trend towards online and covid places the immediate future of retailers in doubt not of their making.
Large center will need to restructure for a permanent down turn
Okay, so the post has veered off topic.
I negotiated with Westfield and achieved a 50% reduction in rent for 6 months as well as the option to delay the other 50%, which I did not take up. The 50% rent reduction started from April 1.
Most major landlords are now offering new leases to indies at a considerable discount to base rent.
we are seeing a fundamental shift in cost base. Not enough, but it’s a good start.
Mark R, your comment re government stimulus is a very valid one. None of us know the true underlying state of the economy. There are a lot of so called experts, inferring things are not so bad. For a significant portion of the population, they are receiving more income than pre Covid. Discretionary spending is up, betting agencies are doing well, there are fewer bankruptcies than normal, payday lenders are not doing well and debt help lines are reporting less enquiries for assistance.
This is all great news (apart from the gambling) but it’s not sustainable. Governments now talk in terms of trillions of dollars of stimulus. I remember when a billion dollars was rarely mentioned. To get an idea of that sum, it would take you 31709 years to count to a trillion. This may be off topic, but it must be keeping a lot of people, smart retailers included, awake at night. They know that when/if the taps are turned off, things will get messy very fast.
Peter,
You’re right.
I am doing pre COVID Books and adjustments and a lot of them were not coping beforehand and are getting by with the Jobkeeper and the allowance $10k plus which is NOT included as wages it is aCash Flow Gift.
This is not restricted to Country Australia it’s general and a different story to this Post which I have answered re Country trading.
Mark I think you are right about the shift regionally. I am seeing it here in NSW north of Sydney. Our small torn has families that are usually here only for holidays relocated. It’s great for business. What is interesting it that there are some new businesses in town because of it too. They are small but it is a sign of growth.
Agree with all that stimulus money is having a positive impact at present and yes this will cease and come to an end. Interest rates will remain low for some time. As I said the closure of the international borders is having another stimulus effect. I can’t see these reopening soon.
I agree with Mark that regional towns particularly those within 2 hours drive of the capital cities are becoming very attractive to many city workers which is adding to the growth and opportunity. Game changing technology such as Zoom and Teams and rapid growth of cloud based software are fuelling opportunities for these workers to relocate permanently. Now is a time of opportunity for our channel and other retailers in these towns.
Terry,
The permanent shift is certainly on the rise as well especally the shift of distance travelling time of say within 1,5 hrs max. Central Coast where I am domiciled is booming in housing as is South coast and Southern Highlands not sure re Blue Mountains but the rest our selling out of Sydney high prices amd moving. Some can operate from home -COVID provided this opportunity others for convenience and cheaper housing.
In smaller destinations people are also visiting. There was a special accommodation offer for two week days overnight stays Southern Highlands area for Grey Nomads-$98. per night
All sorts of opportunitiesfor many different clientele Best of luck.
Graeme, yes newsXpress Bowral closed recently, we are getting some of their customers in Mittagong.
It’s been a tough year in the Highlands and the newsagents in the main 3 towns have all cut their hours, opening later, closing earlier, and 2 of the remaining 4 now closing on Sundays.
So not so sure about another lotto opening up in Bowral, with online growing I can’t see anyone investing the money, and rents are way too expensive for a lot of small businesses.
I’ve even heard remaining Bowral newsagency is moving to a smaller shop, which could just be a small town rumour, but who knows.
Thanks for the information Jenny. i have also heard that rumour of downsizing for Camerons however it is as you say a rumour. It’s good to see you are getting some of the spread from the closure.
Be in touch soon . Regards to Craig.