Supermarkets in inner cities

Australian Financial ReviewMichael Bleby Friday, 14 March 2014

As more and more people move into the apartments and townhouses that are springing up in established areas, grocery chains are fighting tooth and nail to be the supermarkets closest to them.

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The population of inner-city and middle-ring established suburbs will jump by 290,000 people in the next three years alone, a population increase that, by itself, will demand as many as 40 more supermarkets, property ­consultancy MacroPlan said.

“There is a lot needed,” MacroPlan chief economist Jason Anderson said.

The challenges to building new supermarkets in these areas are not just financial, however. The space and shape of available sites means there can be no cookie-cutter approach to store design.

“They roll out a certain model, but when you look at these they’re quite often peculiarly shaped land,” JLL’s Mr Doherty said. “Quite often they’ve got more complex access issues.”

Space limitations often mean going underground, as Coles has done in Bay Street, where it has located the car parks, loading turntables, plant and associated lifts.

“You almost get an upside down Coles,” said architect Shane Rothe.

There are also planning hurdles. It is generally harder to get new supermarkets approved in Sydney, where planning authorities still prefer them to be located in traditional shopping centres or suburban strips, than in Melbourne, where authorities are more willing to zone supermarkets in residential areas.

“We’re playing catch-up with Victoria,” Sydney-based Mr Anderson said.

Please click here to download the full Australian Financial Review article.

MacroPlan MacroPlan’s experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities.  Contact Jason Anderson, Chief Economist  today to discuss your property research requirements.