Australian retail landscape, but is being mirrored elsewhere in the developed world. In the US for example, online retail sales penetration is higher than in Australia, the supply of retail floorspace per capita is twice that of Australia, and the most buoyant property sector is industrial because of the dash to build bigger and more sophisticated distribution warehouses to support e-commerce. Yet even in the US, the engine of new shopping centre development is humming back to life after a four year interlude. Why is shopping centre development still thriving in an era that was supposed to be some kind of demolition derby for e-commerce? In the case of Australia, the chart on the right offers a clue. It isn’t the whole answer, but it is certainly a contributing factor – what it seems to be telling us is that rather than e-commerce putting shopping centres out of business, shopping centres are continuing to put main streets out of business. This is by no means a new story, it’s an old one that won’t go away despite decades of hand wringing about the death of authentic shopping places. According to my research, shopping centres accounted for just 27 per cent of Australia’s retail space in 1990. That figure rose to 35 per cent by 2000, and a whopping 44 per cent just 10 years later. The rate of attrition is slowing a little, but not much. By 2020 I estimate that shopping centres will be edging toward parity with out of shopping centre space. The demise of strips is reflected to some extent by the decline of independent retail. Since shopping centre operators have a strong preference for tried and tested concepts, independents have been far more prevalent on main streets where they tend to perish with alarming regularity. It isn’t a perfect measure by any means, but the performance of the sample component of the retail trade data reported by the Australian Bureau of Statistics (ABS) each month is a rough proxy for the fortunes of independent retailers and of the strips themselves. According to the ABS measure, the percentage of retail sales generated by independents has dropped from about 45 per cent in the mid-90s to 35 per cent now. If it weren’t for the cafe/restaurant sector where independents tend to make a better fist of things, the situation would be worse still. Clearly, from an economic standpoint at least, the shopping centre has triumphed and doesn’t really show any sign of letting up. The Corso, Manly, NSW To heap insult on injury, some of the most successful strips just happen to be those in capital city CBDs, dominated by glittering vertical shopping centres. The shopping centres themselves are driving the success of the strip, just as they do in iconic streets like Orchard Rd in Singapore or Nanjing Rd in Shanghai. As much as people flock to shopping centres and shun second tier strips, the thought of dying main streets does not sit well with many of us, and that includes some of the most unsentimental shopping centre professionals I know. Even these hardened individuals usually acknowledge that in the next generation of shopping centres they’ll be striving to recreate the neighbourhood feel of the golden days of the strip. The irony is that a remarkable number of people in local governments that have troubled strips in their jurisdictions are at loggerheads with the businesses that inhabit those same strips. Sure, there are many strips around the place that probably can’t be saved, but there are many that can be, and the solutions are sometimes quite self evident, particularly to an outsider. The problem, often, is not so much understanding what needs to be done, but simply getting everyone with a stake in the project pulling in the same direction. The shopping centre and main street of the future are moving toward convergence. To succeed, main streets will need to mimic the shopping centre’s two biggest advantages – single ownership and unity of purpose – without giving up some of the fragmentation of leasing that drives creativity and difference. New institutional structures have to arise on the main street to make that happen. Shopping centre operators, for their part, make no apologies about borrowing from the main street’s playbook, edging ever closer to making their projects true town centres. For the sake of Australia’s consumers and Australian culture in general we should all hope that neither the shopping centre nor the main street is a clear winner. Both can reinforce the other. Michael Baker is principal of Baker Consulting and can be reached at michael@mbaker-retail.com and www.mbaker-retail.com.