Everything's on sale....

[Scott No Mates]

Even today's financial review shows westfield taking a 6% hit on new merchants. Only Charter Hall was showing any growth on incoming retailer rents.

 

[BayView]

I guess for most of us our perceptions are coloured by our immediate experience.

There is no way I can get my car into my mechanic at short notice. And my dentist is always booked at least a week out.

The cafes around where I live are going nuts. They're packed all weekend.

So are the good bread shops. And the fish joint. Even the local book store is going well.

My local Bunnings gets so busy there is point going there after 8.30am on the weekends - I think they're building another one nearby.

Retail stores on the main street come and go, but they always have. When a new food store pops up, they seem to do okay. I've got a Woollies up the road from me, but now that their offering is becoming more generic I'm finding myself shopping more often at the small local shops.

Maybe your mechanic has less staff than last year? The fact that they are not available isn't an indicator; we can easily get 3 head gasket jobs in one week which will blow out our service bookings for a week in advance, yet the services overall might be down in volume (and they are).

We are seeing a pattern of seriously overdue cars in the last 12 months or so, seriously worn tyres etc - being put off as long as possible. This has resulted in an increase in larger jobs where the car has been neglected until it blows up.

We had a lady yesterday who came in for a puncture repair; turns out the tyre had literally worn through, and the other front tyre was almost the same. We inspected the front brakes while doing the tyres and found the pads were about 1mm from metal-to-metal, and her service sticker on the windscreen (not one of ours) was due in April 2010. That's not a type-o. This means her last service was probably in Oct, 2009.

I'm not denying that shopping activity is still there, and some areas such those where young professionals on good incomes will pretty much always do well in terms of volume of sales; this is a demographic which has a large disposable income and it gets disposed of.

The % of folk in this demographic wouldn't be the majority of folk across the Country, I'm tipping; maybe the top 10%?

Folk in this demographic who move primarily within these areas geographically probably won't see what the wider picture is - maybe a few searches on the internet will form their opinion.

We have a Bunnings near us which is choc-a-bloc on weekends too; it's the common pattern of how that business works; working people who can only do the handyman stuff on weekends; nothing new there in the last 50 years I know of.

When we first moved down here I was renovating our house and almost living in "Home" hardware through the week; the midweek activity was way less; much of it yer retired old boy and a few tradies, but it went bang on the weekends.

The other side of that picture is why is the volume of folk in Bunnings seemingly increasing? Talk to tradies who do reno work and you might hear a different outlook; less work as folk decide to save money and try to do it themselves. Maybe I'm wrong; but I speak to lots of tradies.

You need to look below that exterior picture, look wider and pay attention to such things as staff levels, gross profits etc.

Employees are not usually in tune with these sorts of aspects, and even some employers in certain industries might be the same if their particular industry is doing well.

I even hear it with the r/e's; some areas are great, but many are not. It'll depend who you talk to what your info will be.

 

[Nemo30]

The other side of that picture is why is the volume of folk in Bunnings seemingly increasing? Talk to tradies who do reno work and you might hear a different outlook; less work as folk decide to save money and try to do it themselves. Maybe I'm wrong; but I speak to lots of tradies.

My dad's Mitre 10 (majority of Mitre 10's are privately owned) is doing pretty well at the moment for precisely the reason you mention - everyone is DIYing instead of getting a tradie.

He has a giant Bunnings about 2km's up the road and is about to get a Masters even closer. Very hard to compete.

Wherever possible the product in my dads shop is sourced from other small local manufacturers (his shop is near a manufacturing area)- buying local keeps other locals in jobs. He has signs all over his store drilling that point.

I dont think office workers (I am one) really understand how tough it is to be a small business owner.

Dont get me started on 'Buy nothing new month' ....

 

[chilliblue]

Top Ryde was sold to US private equity firm the Blackstone Group for $341 million making them a major retail mall player in Australia.

Valued at $840 million four years ago it will be interesting to see if it becomes a good buy.

 

[china]

I understand your business is highly discretionary. People can defer servicing their cars and drive around on bald tyres for some time. Dentistry is the same - If it doesn't hurt you don't need a dentist.

In the last couple of weeks I have required the services of both.

1. Mechanic - called them and got an appointment the next day. None of the usual 'you have to book in' next week to get it done. Did the service, with the extras completed the same day. Normally the extras would require a separate booking in another few days.

2. Dentist - called them and got an appointment the next day. Did all the work on the spot - none of the usual 'I'm busy' you'll need to come back on Thursday for extra work.

Both are usually highly booked and hard to get appointments, but atm easy. IMO this is a sign or a weak economy.

Still hard to get an appointment with my GP though...

Hard to correlate state of economy with ease of appointment time. Sometimes you can get an early appointment or even within the same day if there is a sudden cancellation.

Alternatively, you may only be able to get an appointment in a few weeks if the doctor or dentist has suddenly decided to go on a three week cruise of Scandinavia. Generally, if you find it hard to get an appointment, you can speak to the owner direct (GP or dentist). They value your business far more than the girl answering the phone who is on a wage.

 

[Scott No Mates]

Top Ryde was sold to US private equity firm the Blackstone Group for $341 million making them a major retail mall player in Australia.

Valued at $840 million four years ago it will be interesting to see if it becomes a good buy.

I haven't seen the figures on the cap rate yet but i would be expecting high 8%