Australia s food retail concept leads global best practice

Australia’s food retail concept leads global best practiceAustralia has set the standard in food retail best practice, and international retailers are following suit to establish strong food retail formats in shopping centres, particularly in the US. Robert Welanetz, chairman of the International Council of Shopping Centers, spoke about the trend at a shopping centre industry lunch in Sydney last week.Welanetz said Australia is at the leading edge of best practice in its use of food retail as an anchor tenant in shopping centres – and the rest of the world is paying attention.”Probably the hottest food concept in the US today is Whole Foods, and it has become an anchor in shopping centres – when [in the past] you never saw a supermarket or a grocer as an anchor of a shopping centre the way you [see it] in Australia,” he said.”So people are reacting to the tone you’re setting in the creative, innovative thinking you’re bringing to bear on the execution of retail.”Welanetz said there is recognition in the US that these large-format supermarkets and multidimensions of food are driving customers to visit.”So there’s now an intersection of, ‘Okay, if we’re going to do that, let’s do it at world’s best practice. Where’s world’s best practice? Australia is the iteration,'” he said.”I can’t tell you directly that Whole Foods has taken its full attitude to how it merchandises and what it does [from Australia], but I can tell you they’re clearly very aware of what goes on in [Australian supermarkets].”Welanetz noted that American retail evolved differently to Australian retail, which led to the variation in anchor tenant preference. Welanetz said that for markets such as Australia and Canada, fewer full-priced department stores made food “an almost essential component” in the early-stage development of large-scale shopping centres. In the US, supermarkets were either freestanding or resided in smaller, open-air centres.Speaking to Property Week, Welanetz praised innovation in Australian supermarkets, noting the multidimensional format – namely the inclusion of eating areas – which makes a supermarket part food purveyor and part restaurant.”And, in some cases, they get into the general merchandise category – gifts and accessories – and they end up being lifestyle,” Welanetz said.”You’d never see that in the States,” he added, though he predicts this will eventually change. “I think it will continue to emerge [in] these formats and prototypes. The retail community is going to push this.”Welanetz said, “It’s not [the fact of] having food, it’s how food is executed,” noting that major national supermarket chains in the US – such as Whole Foods, Trader Joe’s and Kroger – are all developing a more “boutique” feel, despite being mass-market retailers.”And now it will be interesting to see how Walmart, the biggest grocer in the world, reacts to [the trend].”In his address to attendees, Welanetz referred to the success of Sydney food destination The Grounds of Alexandria. Located in the industrial heartland of Alexandria, the cafe’s success signals a shift in how retailers approach food, as the venue features takeaway vendors, a farm, a garden and a florist.”I think the crux of what makes this industry interesting is the entrepreneurial instincts that still exist today,” Welanetz said.”And what we have to do as an industry is to be committed to uncovering those [instincts] and allowing them to develop, and to nurture the growth and development of those concepts.”The industry needs to continue to support the entrepreneurs trying to become better at what they do, and developing and creating a demand, as opposed to just reacting to whatever consumers’ basic needs are,” he added.