Canberra Outlet Centre Economic Impact

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick (Canberra Outlet Centre)

Economic impact considerations

October 2015

MacroPlan Dimasi

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Prepared for: Direct Factory Outlets Canberra Pty Ltd (Receivers & Managers Appointed)

MacroPlan Dimasi staff responsible for this report:

Tony Dimasi, Managing Director – Retail Denis Chung, Manager – Retail Ziggy Gelman, Consultant – Retail

Table of contents

Executive summary i

Introduction iii

1 Centre location and context 1

2 Need and demand 5

Market research 12

Sales potential 13

3 Impacts on other activity centres 16

4 Economic and social benefits 19

Net community benefit 21

Executive summary

• Canberra Outlet Centre is located within the Fyshwick district to the south-east of the Canberra City Centre, in a high profile and easily accessible location. Fyshwick is a large, well established employment and retail/bulky goods precinct, and is also the primary focus of industrial/showroom activity in Canberra.

• Canberra Outlet Centre has a floorspace of some 45,400 sq.m which covers both the factory outlet and homemaker components of the centre. The centre is in receivership and has significant vacancies.

• A small supermarket of 1,000 sq.m at Canberra Outlet Centre aims to provide needed services to current and future local workers and businesses in Fyshwick and create additional employment in the area, also effectively utilising some of the vacant floorspace at the centre.

• Independent market research undertaken in July and August 2015 at the Canberra Outlet Centre identified the need and demand for a supermarket, which would be mainly used by surrounding workers and existing centre shoppers for their convenience shopping. More than 65% of the surveyed businesses revealed that they, or their employees, would use a supermarket facility at the Canberra Outlet Centre. The majority of internal tenants indicated that they would use a supermarket facility at the centre for their business purchases (77% of respondents) or for their own personal use (88%), while over 50% of shoppers expressed a strong desire for a supermarket at the centre.

• There are no supermarkets located in Fyshwick, with the closest supermarkets located over 4 km away at Narrabundah (960 sq.m), Griffith (800 sq.m) and Manuka (3,480 sq.m).

• There are 12,700 workers within close proximity of Canberra Outlet Centre, who generate a total of $90.6 million of FLG expenditure. Around 10% of this expenditure is expected to be directed to a future supermarket at Canberra Outlet Centre. Local businesses and a small proportion of existing shoppers are also expected to direct some spending to a future supermarket at the centre.

• The sales potential of a 1,000 sq.m supermarket at Canberra Outlet Centre is estimated at around $11.6 million in 2016/17 (in constant 2014/15 dollars and including GST).

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick i (Canberra Outlet Centre) Economic impact considerations Executive summary

• We estimate that only around $2 million, or 18.2%, of the estimated supermarket sales would be redirected/redistributed from supermarkets located in the immediate area, while around $6 million, or 51.7%, of the estimated supermarket sales, would be expected to flow from supermarkets located in the broad Canberra region, as the majority of the supermarket patronage is expected to originate from a broad region from throughout Canberra, rather than solely from the local area.

• The estimated dollar impacts would be distributed across a large number of supermarket facilities, and would be all relatively minor. The estimated impacts therefore would not threaten the viability of any surrounding supermarket facilities, and existing facilities are likely to recover from such trading impacts within a short period of time (less than one year).

• In particular, the existing supermarkets in the nearby local centres are not threatened by this proposal by virtue of the fact that:

- the great majority of the business to be achieved by the proposed small supermarket at Canberra Outlet Centre will be drawn from workers of Fyshwick and the existing visitor base of the Canberra Outlet Centre, rather than from the local population of Narrabundah, Griffith or Kingston; and

- the trading hours for the proposed small supermarket will be 10 am to 6 pm, as compared with much longer trading hours that are available to the various supermarket facilities within the local centres.

• On the other side of the equation, the development will result in a broad range of economic benefits, particularly in improving the range of convenience retail facilities for local workers and shoppers the Fyshwick area, as well as directly creating over 50 new ongoing jobs, and in total more than 100 jobs, which will benefit the local economy of the region.

• Thus, it can be concluded that a significant net community benefit will result from the proposed inclusion of a supermarket at Canberra Outlet Centre.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick ii (Canberra Outlet Centre) Economic impact considerations

Introduction

This report examines the economic issues related to the proposed Territory Plan Variation – Block 8, Section 48 Fyshwick, which proposes a site specific variation for the Canberra Outlet Centre to allow for the development of a supermarket restricted to 1,000 sq.m within the existing building envelope of the centre.

The report sets out the following in assessing the likely economic impacts and benefits from the proposed specific plan variation:

i. The location and surrounding context of the Canberra Outlet Centre.

ii. The need and demand for the proposed supermarket of 1,000 sq.m within the centre, and the likely sales potential of the store.

iii. The trading impacts which can be anticipated on the surrounding network of activity centres, particularly the closest local centres to the Canberra Outlet Centre.

iv. The economic and related social benefits that would result from the proposed variation.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick iii (Canberra Outlet Centre) Economic impact considerations

1 Centre location and context

Canberra Outlet Centre is situated on the north-east corner of Canberra Avenue and Newcastle Street, within the Fyshwick district to the south-east of the Canberra City Centre (refer Map 1.1). It is a high profile and easily accessible location, with Canberra Avenue being the main road between Queanbeyan and Canberra. Fyshwick is a large, well established employment and retail/bulky goods precinct, and is also the primary focus of industrial/showroom activity in Canberra.

The Monaro Highway runs a short distance to the west of the centre, providing further regional access to the centre, particularly for Tuggeranong residents in southern Canberra; while Hindmarsh Drive provides direct access from the Woden Valley and Weston Creek districts. Residents from the central and northern suburbs of Canberra also have relatively straightforward access to the site, via the main roads leading to the airport, which connect with the Monaro Highway a short distance north of Fyshwick. Regional accessibility to Fyshwick is excellent, and this is why it has emerged over many years as a key employment district for the ACT, as well as being a major retail/bulky goods destination.

Map 1.2 illustrates the local context of the centre, showing its location within the southern part of Fyshwick. Fyshwick is a major employment precinct of Canberra and includes a wide range of commercial and retail (mostly bulky goods) facilities. The area immediately surrounding Canberra Outlet Centre incudes many retailers such as Chemist Warehouse, Anaconda, Baby Bunting to the east, and The Good Guys, Bunnings and Domayne to the north.

Canberra Outlet Centre has a floorspace of some 45,400 sq.m which covers both the factory outlet and homemaker components of the centre. The centre is in receivership and has significant vacancies.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 1 (Canberra Outlet Centre) Economic impact considerations

Map 1.1: Canberra Outlet Centre Regional context

Map 1.2: Canberra Outlet Centre Site location 1 Centre location and context

A small supermarket of 1,000 sq.m at Canberra Outlet Centre aims to:

• provide needed services to local workers and businesses in Fyshwick;

• effectively use some of the vacant floorspace at the centre, at what is already a well- established retail destination;

• create additional employment; and

• provide services for future workers and businesses as employment in Fyshwick grows.

There are many examples where factory outlet centres in Australia include supermarket facilities, including the following:

• Harbour Town on the Gold Coast, which is 51,000 sq.m in size, includes a full scale Woolworths supermarket (3,890 sq.m). The centre is the only factory outlet centre serving the Gold Coast, which includes a resident population of around 550,000.

• Harbour Town Adelaide is 30,000 sq.m in size and includes a 3,800 sq.m Woolworths supermarket as well as a 1,000 sq.m Target outlet store. The centre is located in a non- residential precinct of Adelaide, within the Adelaide Airport, and draws customers from throughout the wider Adelaide region.

• DFO Cairns includes 22,740 sq.m of retail floorspace including a full-line Coles supermarket of around 3,500 sq.m. The centre is located in Westcourt to the south west of the Cairns CBD, and is the only outlet centre in Cairns, serving a population of around 240,000 in the surrounding region.

• Market City is the only centre in Sydney CBD with factory outlet stores. The centre is 15,320 sq.m in size and includes an independent supermarket (Thai Kee Supermarket) of 1,770 sq.m in size.

It is also important to consider any potential impacts that the proposed inclusion of a small supermarket at Canberra Outlet Centre might have on the existing retail hierarchy of Canberra, particularly town centres and nearby smaller centres, in line with the requirements of the ACT Territory Plan. Therefore, the remainder of this report assesses both the need and demand for the proposed supermarket and its expected impacts and benefits.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 4 (Canberra Outlet Centre) Economic impact considerations

2 Need and demand

Canberra Outlet Centre is located in Fyshwick, which is a major employment hub of Canberra and includes a broad range of retail and commercial facilities. Using Journey to Work data collected from the ABS Worker Profile 2011, a worker trade area has been defined as shown on Map 2.1. It is estimated that around 10,109 people work in the Fyshwick sector and an extra 2,564 work in the area to the south, labelled the Symonston sector. Canberra Outlet Centre is ideally placed to serve workers and businesses within this area, in terms of both general retail needs as well as the fresh food and grocery needs of the worker population.

The profile of these workers can be established from the Working Population Profile available from the ABS, which was released as part of the 2011 ABS Census. Table 2.1 and Chart 2.1 detail the key characteristics of the worker population, compared with the average for the ACT and Australia, with the key highlights as follows:

• The worker population of the trade area is dominated by males, at 69% of the population overall.

• The age profile of the trade area workforce is comparable to the broader ACT workforce.

• Income levels of the trade area workforce are skewed towards the lower ranges, as compared with the ACT benchmarks.

• By far the mode of transport mostly used by the trade area workforce is car driver.

The trade area workforce includes much higher than average proportions of tradespersons and technicians as well as labourers and transport workers, compared with the broader ACT workforce.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 5 (Canberra Outlet Centre) Economic impact considerations

Map 2.1: Canberra Outlet Centre

Worker trade area surrounding facilities 2 Need and demand

Table 2.1 Canberra Outlet Centre worker trade area - Worker population profile, 2011

Fyshwick Symonston Total ACT Australia Characteristics sector sector Worker TA avg.

Worker population 10,109 2,564 12,673 207,900 10,058,325

Gender Male 71.3% 61.9% 69.4% 50.2% 53.4% Female 28.7% 38.1% 30.6% 49.8% 46.6%

Age distribution Aged 15-19 5.6% 1.1% 4.7% 5.6% 5.6% Aged 20-29 25.5% 17.0% 23.8% 23.1% 20.8% Aged 30-49 43.3% 52.6% 45.2% 45.7% 45.2% Aged 50-64 22.5% 27.1% 23.4% 23.2% 25.1% Aged 65+ 3.1% 2.2% 2.9% 2.4% 3.2% Average age 39.8 42.6 40.4 40.1 41.0

Occupation Managers 17.8% 16.2% 17.5% 16.7% 13.1% Professionals 12.7% 39.6% 18.1% 30.7% 21.7% Clerical and service workers 19.2% 24.9% 20.3% 30.0% 24.9% Sales workers 14.6% 0.9% 11.9% 6.8% 9.5% Tradespersons and technicians 21.3% 13.0% 19.7% 9.2% 14.4% Labourers & transport workers 14.3% 5.4% 12.5% 6.5% 16.3%

Personal income Less than $20,799 9.4% 1.9% 7.9% 11.1% 16.4% $20,800 - $41,599 23.9% 8.7% 20.9% 16.5% 27.5% $41,600 - $64,999 31.9% 20.1% 29.5% 23.9% 25.9% $65,000 - $103,999 24.4% 45.4% 28.6% 31.3% 20.0% $104,000 or more 10.4% 23.9% 13.1% 17.3% 10.3% Average income 64,415 96,024 70,807 76,742 59,378

Mode of transport Train 0.0% 0.0% 0.0% 0.1% 6.3% Tram (& light rail) 0.0% 0.0% 0.0% 0.0% 0.5% Bus 1.7% 2.3% 1.8% 6.3% 3.5% Car driver 79.9% 79.1% 79.7% 63.2% 60.2% Car passenger 5.1% 5.1% 5.1% 7.1% 5.3% Bicycle 0.5% 1.6% 0.8% 2.3% 1.0% Other 3.9% 2.7% 3.7% 7.6% 8.6% Non travel 8.9% 9.0% 8.9% 13.4% 14.6%

Source: ABS Worker Population Profile 2011, Macroplan Dimasi

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 7 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 8 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

Table 2.2 details the industry of employment of people working within ACT – East, which is the ABS defined Statistical Area Level 2 (SA2) covering the areas of Fyshwick and Symonston. These figures are compared with the averages for ACT and Australia. The highest industry of employment is Public Administration and Safety, accounting for 22.1% of all workers within the area, followed by Retail Trade at 15.2%. This demonstrates the importance of the retail sector within Fyshwick and the surrounding area.

Table 2.2 Worker trade area - employment by industry (000's)

ACT - East ACT Australia No. % of total No. % of total No. % of total

Public administration and safety 3.2 22.1% 63.8 39.8% 629 7.8% Retail trade 2.2 15.2% 5.5 3.4% 631 7.8% Construction 1.5 10.8% 11.7 7.3% 889 11.0% Manufacturing 1.4 9.7% 2.7 1.7% 795 9.8% Professional, scientific and technical services 1.3 9.3% 16.4 10.2% 695 8.6% Wholesale trade 1.0 6.8% 1.4 0.9% 310 3.8% Transport, postal and warehousing 0.8 5.5% 4.3 2.7% 465 5.7% Other services 0.8 5.2% 6.3 3.9% 344 4.2% Information media and telecommunications 0.5 3.5% 4.5 2.8% 160 2.0% Administrative and support services 0.4 3.0% 5.3 3.3% 220 2.7% Accommodation and food services 0.3 2.3% 6.4 4.0% 316 3.9% Health care and social assistance 0.2 1.4% 13.5 8.4% 820 10.1% Financial and insurance services 0.2 1.2% 2.3 1.4% 352 4.3% Electricity, gas, water and waste services 0.2 1.1% 1.2 0.7% 139 1.7% Rental, hiring and real estate services 0.2 1.1% 2.4 1.5% 157 1.9% Education and training 0.1 0.9% 10.8 6.7% 561 6.9% Arts and recreation services 0.1 0.6% 1.8 1.1% 109 1.3% Agriculture, forestry and fishing 0.0 0.1% 0.2 0.1% 238 2.9% Mining 0.0 0.1% n/a n/a 261 3.2% Total 14.4 100.0% 161 100.0% 8,091 100.0% Source: ABS Worker Population Profile 2011, Macroplan Dimasi

The presence of these workers in Fyshwick, and the convenience which Canberra Outlet Centre offers to them, means that the centre is extremely well placed to service these workers for their retail needs while at work.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 9 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

Table 2.3 illustrates the estimated retail expenditure by the worker trade area by category. Retail expenditure undertaken by businesses (e.g. supplies for tea rooms, etc) is additional to these amounts.

Table 2.3 Canberra Outlet Centre Worker TA - retail expenditure by category, 2014/15*

Est. retail spend Est. total Est. spend at/near place of work Category per person ($)** retail spend ($m) % ($m)

Total est. workers 12,700

Food Food, liquor & groceries (FLG) 7,130 91 20% 18.1 Food catering 1,970 25 30% 7.5

Total Food 9,100 116 22% 25.6

Non-food Apparel 1,610 20 10% 2.0 Household goods 2,820 36 5% 1.8 Leisure 790 10 10% 1.0 General retail 1,260 16 20% 3.2

Total DSTM 6,480 82 10% 8.0

Retail services 480 6 30% 1.8

Total non-food 6,960 88 11% 9.9

Total retail 16,060 204 17% 35.5

*Including GST **Based on average per capita spend for resident main trade area, which covers all of Canberra. Source: MarketInfo; MacroPlan Dimasi

There are around 12,700 workers within the worker trade area defined for Canberra Outlet Centre. The estimated retail spend per worker is based on the average per person spend for the resident main trade area, which covers all of Canberra. On this basis, the estimated total retail spend of the relevant workers was $204 million in 2014/15.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 10 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

Of course not all retail expenditure by workers is directed to retail facilities near the workplace. Workers generally spend money on food and drink and on giftware, leisure, apparel and retail services items during lunchtime, and before and after work. The potential proportions of retail expenditure for each retail category by local workers directed to retail facilities near their workplaces are estimated as follows:

• FLG – 20%

• Food Catering – 30%

• Apparel – 10%

• Household goods – 5%

• Leisure – 10%

• General retail – 20%

• Retail services – 30%

Based on this analysis, it is estimated that local workers could potentially spend a total of $18.1 million on FLG (i.e. food and groceries for consumption off-premises) at facilities near their workplaces. Expenditure by businesses would add further to the available expenditure for a small supermarket at Canberra Outlet Centre.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 11 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

Market research

To further assess the demand for convenience shopping and personal services, additional market research was also undertaken in July and August 2015 by an independent research company for the Canberra Outlet Centre. The main findings of this research are summarised as follows:

• The survey of 120 business owners and employees in the Fyshwick area indicated that 70% of the respondents felt there was a gap in the services and products available in the local area. The identified gap included products for convenience purposes such as bread and milk, and fresh food items. More than 65% of the surveyed businesses revealed that they, or their employees, would use a supermarket facility at the Canberra Outlet Centre. The addition of a supermarket was also considered (over 60% of respondents) to be a beneficial attraction for the Fyshwick area as a whole.

• Internal tenants at the Canberra Outlet Centre were also surveyed, and indicated overwhelmingly that the absence of a convenience and fresh food offer at the centre was also a significant gap. The majority of respondents indicated that they would use a supermarket facility at the centre for their business purchases (77% of respondents) or for their own personal use (88%). 85% of the surveyed tenants also considered that the addition of a supermarket would increase customer patronage to the centre.

• In addition to business owners and centre tenants, shoppers (over 570 respondents) at the Canberra Outlet Centre were also surveyed, with over 50% of the respondents expressing strong desire for a supermarket at the centre. Convenience shopping (for items such as bread and milk) was the reason for using a supermarket at the centre for 25% of the respondents, while only 20% of shoppers surveyed indicated that they would use such a facility for their weekly food and grocery needs.

• The above results therefore highlight the need and demand for a supermarket at the Canberra Outlet Centre, which would be mainly used by surrounding workers and existing centre shoppers for their convenience shopping.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 12 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

Sales potential

The proposed addition at the Canberra Outlet Centre is for a small supermarket of approximately 1,000 sq.m of floorspace (GLA). We consider that this supermarket could potentially be an IGA or Foodworks, though Woolworths might well consider this site for a possible small format store.

The estimation of supermarket sales potential firstly considers the appropriate expenditure market, which in this case is the take-home food and packaged liquor (FLG) market. The typical proportion of this expenditure directed to supermarkets is then assessed. Finally, the market shares of this retail expenditure market are estimated for each market segment, such as from local workers/businesses in Fyshwick and existing/future shoppers of the factory outlet centre.

The estimated sales potential for a 1,000 sq.m supermarket at Canberra Outlet Centre is based on the following key points:

• There are currently no supermarkets located in Fyshwick, and the provision of fresh food stores is limited to a few bakeries. Therefore, a supermarket at Fyshwick would be well placed to serve the fresh food and groceries needs of workers and shoppers in the area. While the Fyshwick Fresh Food Markets are located in the general area, the markets are situated well beyond the core Fyshwick employment precinct, and are only open Thursday to Sunday.

• Independent market research undertaken in July and August 2015 sought the views of businesses located in Fyshwick, shoppers and tenants of the centre about a supermarket at Canberra Outlet Centre. As detailed above, the survey found that 67% of businesses in Fyshwick would utilise a supermarket at Canberra Outlet Centre, and 69% of respondents also felt that their employees would also utilise a supermarket at the centre. Over 50% of surveyed shoppers indicated that they would like to see a supermarket at the centre, while 88% of surveyed tenants within the centre indicated that they would use a supermarket in the centre for their own personal shopping requirements. 85% of tenants considered that the addition of a supermarket would attract more potential customers to

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 13 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

the centre, and 67% felt that their businesses would benefit from increased foot traffic generated from the supermarket.

• Supermarkets generate almost all of their sales from the take-home food, grocery and packaged liquor (FLG) expenditure market. There is an estimated 12,700 workers within the area surrounding Canberra Outlet Centre. These workers spend an estimated $90.6 million on food, liquor and groceries (FLG) per annum. Around 20% of this expenditure is estimated to be potentially available, depending on supply to facilities near the workplace, which is calculated at $18.1 million at 2015.

• In general, Australians direct between 70% – 80% of food and grocery spending to supermarkets and major foodstores (i.e. grocery stores greater than 500 sq.m). This ratio varies from location to location and is dependent upon the provision of supermarkets and foodstores within the particular area or region.

• The closest supermarkets to Canberra Outlet Centre are located at Narrabundah, approximately 4.1 km west of the centre, which contains a 960 sq.m IGA, and at Griffith, approximately 4.5 km south-west of the centre, which contains an 800 sq.m independent supermarket. The closest full line supermarket to the centre is Coles (3,480 sq.m) at Manuka, located approximately 4.8 km to the north-west.

Table 2.4 details the key customer market segments which a future supermarket at Canberra Outlet Centre is expected to serve, together with estimates of sales potential the supermarket is considered likely to achieve from each segment. The key points of this analysis are as follows:

• There are 12,700 workers within close proximity of Canberra Outlet Centre, who generate a total of $90.6 million of FLG expenditure. Around 10% of this expenditure is expected to be directed to a future supermarket at Canberra Outlet Centre, having regard to the size of supermarket proposed.

• Local businesses in Fyshwick are also expected to use a future supermarket in the local area, with supermarket sales from businesses estimated at around $1.1 million.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 14 (Canberra Outlet Centre) Economic impact considerations 2 Need and demand

• Existing users of the factory outlet centre are also expected to shop at a new supermarket at the centre. There are currently around 4 million visitors per annum at Canberra Outlet Centre. Around 2.5% of these visitors are estimated to patronise the future supermarket, spending an average of $15 each visit.

In summary, the sales potential of a 1,000 sq.m supermarket at Canberra Outlet Centre is estimated at around $11.6 million in 2016/17 (in constant 2014/15 dollars and including GST). The proposed supermarket would mainly serve local workers, and local businesses.

Table 2.4 Canberra Outlet Centre - Supermarket estimates sales potential, 2016/17*

Est. FLG Est. market Est. sales No. spend share potential Market segments ($m) (%) ($m)

Workers 12,700 90.6 10.0% 9.1 Businesses 1 760 1.9 56.0% 1.1 Existing/future outlet centre shoppers • Number of centre visitors ² 4,000,000 1.5 • % of visitors est. to use smkt 2.5% • Avg. spend at proposed smkt $15 Total 11.6

*Constant 2014/15 dollars & including GST 1. Number of employing businesses in Fyshwick/Symonston; Businesses are assumed to spend an average of $2,500 p.a ($50 per week) on FLG. 2. Based on current visitor numbers to the centre Source: MacroPlan Dimasi

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 15 (Canberra Outlet Centre) Economic impact considerations

3 Impacts on other activity centres

A number of factors need to be taken into account in determining the likely broad trading impacts and subsequent consequences on other retail facilities arising from the addition of a 1,000 sq.m supermarket at Canberra Outlet Centre.

The anticipated impacts on other retail facilities in the region can be estimated on the basis of the available information, but such projections should be considered indicative only for the simple reason that it is very difficult to predict with certainty the precise impact on any one retailer or any other centre that will result from the change of retail structure serving a particular region. The impacted centre or retailer has a number of possible actions which it may be able to take to mitigate the extent of the impact or potentially eliminate it altogether. Expansions and improvements may be undertaken at other centres throughout the region, and all of those factors can change the nature of the impact from the proposed development.

In estimating how the likely impacts will play out on the network of supermarkets, the following factors will all be of relevance:

• The distance of the (impacted) supermarkets, by road, from Canberra Outlet Centre.

• The size of the centre, in terms of total relevant retail floorspace. More specifically in this instance, the amount of supermarket floorspace is the most important factor to consider.

• The brand of the anchor tenant(s) with the relevant supermarket anchors again being the key factor.

• The respective role and function of each centre/supermarket. For example, a centre might be oriented towards convenience retailing, higher order retailing, homewares/bulky goods, or it might primarily service a worker/transit market.

• The relative accessibility and convenience of the impacted centre/supermarket compared with the proposed retail development.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 16 (Canberra Outlet Centre) Economic impact considerations 3 Impacts on other activity centres

• The estimated performance of the centre/supermarket (in current sales) and projected future performance. This accounts for any future developments in the region that might also impact on the future sales of existing centres.

Based on the above, Table 3.1 below provides an estimation of the broad trading impacts that the addition of a 1,000 sq.m supermarket at Canberra Outlet Centre would have on the surrounding supermarkets.

The key points to note are as follows:

• The addition of a 1,000 sq.m supermarket at Canberra Outlet Centre would enable the centre to improve its convenience offer to better serve its customer segments, particularly workers in the area, possibly resulting in some transfer of business from supermarkets/stores located in the surrounding region.

• For the estimated impacts on other supermarkets, Table 3.1 shows that only around $2 million, or 18.2%, of the estimated supermarket sales would be redirected/redistributed from supermarkets located in the immediate area, while around $6 million, or 51.7%, of the estimated supermarket sales, would be expected to flow from supermarkets located in the broad Canberra region.

• The estimated dollar impacts on the surrounding local centres are therefore estimated to be negligible, based on the following considerations:

- The local centres serve their own respective localised catchments incorporating the immediately surrounding residents, for their convenience and top-up needs only, and would continue to fulfil that role following the proposed addition of a supermarket at Canberra Outlet Centre.

- Furthermore, the great majority of the patronage for the proposed small supermarket at Canberra Outlet Centre would be drawn from the surrounding workers at Fyshwick and shoppers already visiting the centre. The store’s proposed trading hours – 10 am to 6 pm – will reinforce this pattern, and will not offer the same localised convenience as the food & grocery stores in local centres such as Narrabundah and Griffith which

Proposed Territory Plan Variation - Block 8, Section 48 Fyshwick 17 Economic impact considerations 3 Impacts on other activity centres

normally extend to 9 pm or even later in some cases, and certainly open earlier than 10 am. This patronage obviously originates from a broad region comprising all or most of Canberra, rather than solely from the local area. For this patronage, the main supermarket facilities utilised for their weekly food and grocery shopping needs would be located closer to their place of residence, rather than their place of work, thus the impacts would be diffused across a large number of such stores.

Table 3.1 Canberra Outlet Centre - supermarket impact analysis, 2016/17*

Distance from Estimated impact Canberra Outlet Centre Supermarkets (km) ($M) (% of total)

• IGA Narrabundah 4.1 0.5 4.3% • Shop-Rite Griffith SC 4.5 0.3 2.6% • Coles Manuka 4.8 1.0 8.6% • Friendly Grocer Red Hill 5.1 0.2 1.7% • Other (throughout broader Canberra) - 6.0 51.7%

Total smkts 8.0 68.9%

Plus impacts on non-smkt traders** 3.6 31.1%

Total supermarket sales 11.6 100.0%

*Constant 2014/15 dollars & including GST **Includes small foodstores, fresh food operators, markets, freestanding liquor stores, etc. Source: MacroPlan Dimasi

Proposed Territory Plan Variation - Block 8, Section 48 Fyshwick 18 Economic impact considerations

4 Economic and social benefits

The addition of a supermarket to Canberra Outlet Centre is likely to result in a range of economic impacts. From a trading point of view, some impacts are likely to be experienced by competitive facilities throughout the trade area, and the likely extent of these trading impacts was considered in the previous section. On the other side of the equation, the development will result in a significant range of economic benefits, particularly for workers and shoppers of the Fyshwick area. The key positive impacts will include the following:

1. Serving the convenience needs of workers in Fyshwick

There are currently no supermarkets located in Fyshwick, and the provision of fresh food specialty stores in the area is very limited. In fact the only stores where workers can buy groceries in Fyshwick are small convenience stores such as the kiosks attached to service stations. A supermarket at Canberra Outlet Centre will be able to provide workers with a facility for their convenience needs and will meet the significant under-provision of fresh food facilities within the Fyshwick employment precinct.

2. Improving underutilised floorspace at Canberra Outlet Centre

The proposal is for the supermarket to be added to Canberra Outlet Centre within the current floorspace of the centre. There are currently a number of vacancies at the centre, particularly within the homemaker part. Therefore, the new facility will revitalise the centre by replacing vacant and underutilised floorspace, thus greatly improving the overall presentation and performance of the centre.

3. Greater shopping choice, convenience and amenity

A redeveloped Canberra Outlet Centre will offer a greater provision and a wider range of shopping facilities for workers, businesses and visitors in the Fyshwick precinct. Fyshwick currently contains a significant number of retailers selling a broad range of products, though does not include any supermarket facilities. The proposed supermarket will add to the centre’s convenience offer, and provide shoppers and workers with a greater range of products at the one convenient location.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 19 (Canberra Outlet Centre) Economic impact considerations 4 Economic and social benefits

4. Additional employment

The addition of a supermarket at Canberra Outlet Centre will create a number of new ongoing jobs, which will benefit the local economy of the region.

Table 4.1 presents an estimate of the likely additional employment that would be directly generated by the proposed supermarket at Canberra Outlet Centre. Based on the amount and nature of floorspace, which in the most part will replace the existing vacant floorspace at the centre, we estimate that 38 net ongoing jobs will be created by the addition of a supermarket at the centre.

The estimated 38 new retail jobs at Canberra Outlet Centre will result in a further 15 jobs created indirectly in the broader community from supplier induced multiplier effects (based on the appropriate ABS input/output multipliers). Jobs created include both full- time and part-time positions.

Table 4.1

Canberra Outlet Centre - estimated total additional employment levels* (Directly attributable to the proposal)

Direct Supplier Total employment¹ employment multiplier effects

Centre employment² 38 15 53

* Employment totals include both full-time and part-time work 1. Indicates net employment at the proposed supermarket, estimated at 40 employees per 1,000 sq.m, and includes an allowance for reduced employment levels at impacted centres, estimated at 5% of the total increase 2. Indicates the estimated number of net additional ongoing jobs as a result of the proposed development Source: MacroPlan Dimasi

While the employment creation estimated to be directly attributable to the incorporation of the supermarket within Canberra Outlet Centre is estimated to be in excess of 50 jobs, there would be additional employment generating benefits that would flow indirectly from the supermarket’s addition. In particular, it is expected that the incorporation of the small supermarket would stimulate additional leasing for the remaining vacant space within the centre, which amounts to around 3,000 sq.m over and above the space to be occupied by the proposed supermarket.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 20 (Canberra Outlet Centre) Economic impact considerations 4 Economic and social benefits

The addition of a supermarket is also highly likely to improve the prospects of the centre retaining tenants which are currently on holdover or which face an expiring lease in the next 6 months. In total, we consider that the incorporation of a small supermarket is likely to increase employment at the centre by more than 100 new positions.

Net community benefit

The analysis presented in this report has demonstrated that a range of economic and social benefits are likely to arise from the inclusion of a supermarket within the existing building footprint of Canberra Outlet Centre. These benefits can be summarised as follows:

• Greatly improving the range of convenience retail facilities for local workers and shoppers at Fyshwick and particularly addressing the minimal provision of fresh food facilities;

• Improving the underutilised floorspace at Canberra Outlet Centre; and

• Additional employment opportunities.

Against these benefits, a minor level of impact is projected on supermarkets within Canberra. However, these impacts will not threaten the ongoing viability of any existing facilities. In particular, the existing supermarkets in the nearby local centres are not threatened by this proposal by virtue of the fact that: i. the great majority of the business to be achieved by the proposed small supermarket at Canberra Outlet Centre will be drawn from workers of Fyshwick and from the existing visitor base of the Canberra Outlet Centre, rather than from the local population of Narrabundah, Griffith or Kingston; and ii. the trading hours for the proposed small supermarket will be 10 am to 6 pm, as compared with much longer trading hours that are available to the various supermarket facilities within the local centres.

Thus, it can be concluded that a significant net community benefit will result from the proposed inclusion of a supermarket at Canberra Outlet Centre.

Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 21 (Canberra Outlet Centre) Economic impact considerations