Barbeques Galore recently opened its fourth showroom in South Australia and sees the potential to possibly open two or three more stores in the Adelaide area on the back of a strong finish to the financial year. The new showroom, in Noarlunga, opened in May and joins Barbeques Galore’s three previously established SA sites at Gepps Cross, Marion and Mile End. Luke Naish, CEO, Barbecues Galore, told Inside Retail PREMIUM, that he sees plenty of potential for the brand in SA. “We always knew t
there was opportunity to expand, and even with the Noarlunga business we could potentially open at least another two or three sites in Adelaide if the right offer came up,” Naish said.
“Trading conditions have been consistently strong for the last two years. That’s unusual when you look at the economy, which is relatively flat in Adelaide. We think we’ve taken a little bit of market share.”
Naish puts the good results down to innovative product releases, a real focus on customer service, building brand loyalty and a consistently strong focus on face-to-face staff training.
Naish, who said he personally reads all customer complaints, said retailers must be absolutely committed to ensuring a great customer experience instore.
“We are a destination store, so the customer has to make up their mind to consciously want to come to our store. We don’t rely on the traffic generated by a shopping centre. Your proposition has to be rock solid.”
Naish said it’s been a good year so far for Barbecues Galore. After a solid March, trade eased off in April. But following the federal budget announcement in May the business has seen strong growth, which continued through June.
“We’re certainly ending the financial year in really good shape,” Naish said. “We spend more time and energy worrying about what we are doing within the four walls of our business than the larger macro conditions. You control the controllables, and if you get upside through larger macro economic advantages, then that’s just a bonus.”
Dallas Sears of CBRE, who negotiated Barbecues Galore’s new five-year lease, said large format retail vacancies in Adelaide are currently as low as 0.4 per cent.
LFR boom in SA
According to a recently published CBRE review, a growing number of large format retailers have been looking to expand into South Australia in the past 18 months. And as a result of strong retail sales being recorded in the Adelaide market, established retailers have also been seeking to grow their state presence.
Sears said that on the back of falling fuel prices and low interest rates, retail sales volume growth is expected to remain positive for SA for the remainder of 2015.
Large Format Retail Association (LFRA) CEO Philippa Kelly also credits the federal government’s $5.5 billion small business package, unveiled in the May budget, as a key market driver for the industry. In particular, the ability for small businesses to claim a tax deduction on items up to $20,000 is sending customers through retailers’ doors.
Kelly said the large format retail sector will be one of the key flow-on beneficiaries from the small business tax breaks.
“There is a great deal of discussion within the large format retail sector centred on how to customise its marketing to small businesses; what products small businesses will and are interested in purchasing; and providing products and ranges at competitive prices to take full advantage of the federal budget initiatives,” Kelly said.
This measure applies to single or multiple purchases made from budget night up until June 30, 2017, meaning the end of financial year marketing campaigns of large format retailers will be mapped out accordingly in the coming years.
In South Australia, large format retail sales account for $3.88 billion annually, or 21.8 per cent of all retail sales. The sector also employs more than 25,300 people, both directly and indirectly.