Masters stores to be converted into hypermarkets
A NUMBER of Masters ghost stores have been snapped up by the Home Consortium group, which will transform them into big box lifestyle hubs.
They will be like hypermarkets, where a wide range of products are under one roof.
Home Consortium has announced there'll be three different types of big box lifestyle hubs.
There will be daily needs; leisure, lifestyle and education; and homewares and electrical.
Already established chains will be opened in the big box stores, with retailers like the Good Guys, Spotlight and JB Hi-Fi flagged as potential stores.
Retailers like Woolworths, Coles and Chemist Warehouse fall under the daily needs category, leisure, lifestyle and education includes stores like BCF, Anaconda and Rebel while homewares and electrical hubs will feature stores like Nick Scali and Bing Lee.
The lifestyle hubs will also boast childcare services, medical centres, gyms, children's play centres and cafes.
AN 'OLD SCHOOL' APPROACH
Retail Oasis retail analyst Pippa Kulmar said it was an "old school" approach and sounded the same as already established home improvement hubs.
"It's an interesting time to be doing that given that I think everyone's watching what will happen with Amazon," she told news.com.au.
"Looking at JB Hi-Fi, Amazon is expected to take a fair amount of share.
"It almost feels like very old school retail."
Ms Kulmar questioned whether the hubs would be successful due to the quality of the locations of failed Masters sites.
"I guess they are trying to make it work but if I were them I don't know if I'd invest my money there given the way we all shop is changing dramatically," she said.
"I don't think this is going to rock anyone's world, it's just a reformat of existing retail. If it's convenient, people will go there, but it's not a brand new offer or a brand new player coming into the market.
"I'm sure they've done their numbers and know it'll be profitable, but I don't think it's the most exciting thing that's happened in retail.
"Home improvement centres have been around forever and it sounds like what they're doing. It doesn't make sense when the internet is a lifestyle hub and it depends if the location of the centres are near the right type of customer."
LESS IT MORE
DGC Advisory retail analyst Geoff Dart said retailers who opened in these big box stores would profit.
"Home Consortium bought the property division of Masters from Woolworths, 40 of those are going to be turned into hypermarkets, with people like JB Hi-Fi," he said.
"The reason retailers are now looking at hypermarkets is you can move into a hypermarket like one of the Masters sites for roughly something like $200 per square metre compared to a shopping centre at $600 per square metre.
"The retailers are saying, 'we've got the brand, the people come to where the brand is'. Rent is the major cost, staff and rent are the two key costs, if you can't control your rent your margins go south and your profit goes south.
"Shopping centres are in denial firstly because of what's happening in the real world with hypermarkets and strip-malls, but also the internet, and I think they're stuck between a rock and a hard place where they've got a high-cost fixed asset, retailing is under pressure and probably in real terms declining, as consumers look to other ways to execute their needs [and] they've never had more choice."
Ten of the new big box stores will be opened before Christmas and Home Consortium chairman David Di Pilla told news.com.au it would be the best of the brand retailers under the one roof.
"The locations are generally in high profile growth corridors in Australia's major cities and are easy to access," he said.
"The internal mall concept will hopefully be a pleasant and convenient experience for customers.
"I do believe that the future is very much one of convenience and great value for money and that's very much what we're focused on."
Mr Di Pilla said the company was aware of the rising online influence, but was not concerned.
"We just think if we give retailers a value for money proposition, and make their rentals competitive, it sets them in really good stead to provide great value for money for customers."