To be successful in today’s market, you need to have your eye firmly on your customer and stay close to their changing needs and preferences. Our team’s ability to understand what customers want has secured a strong position for our business as demonstrated by our 2019 full year financial results.
Our proposition is to deliver long-term sustainable returns through economic cycles.
Our strategy is to create the places more people choose to come, more often, for longer.
This is based on the fundamental principle that we compete for our customers’ time and attention and recognise our role is to deliver our retail partners more opportunities for their brands to interact with consumers.
Execution of our strategy focuses on four key stakeholders;
• Our customers – will be customer obsessed delivering extraordinary experiences every day.
• Our retail and brand partners – will be true business partners for our retailers and brands to maximise their opportunity to interact with customers.
• Our people – we will be the place for talent to thrive and;
• Our investors – we will deliver long-term sustainable returns through economic cycles.
Our strategy reinforces the competitive advantage we have in the location of our Westfield Living Centres, in densely populated urban areas, close to where people live and work and embedded in the heart of the communities. Our business is unique in that we cater to our customers throughout their lives and our relevance to them changes at each life stage.
Our 2019 results show our customer-focused strategy is consistently delivering results. Annual customer visits across our portfolio of 42 Westfield Living Centres in Australia and New Zealand is up 12 million to 548 million customer visits. In-store sales on our platform now exceed $25 billion and continue to grow. Our market share continues to grow with more than 7.5% of total retail sales in Australia taking place in our Westfield Living Centres.
We have continued to deliver growth in customer visits and in-store sales because we have remained focused on our customers and we continue to curate our offer to keep pace with their changing expectations.
Retail and change go hand-in-hand. Change is the constant in our business. We adapt to what our customers want and have been at the forefront of change in our industry and market for more than 60 years.
Staying close to our customers and deliberately curating a retail, services and experiences offer that caters to their changing expectations continues to set us apart. We have 3,600 retail and brand partners represented in more than 12,000 outlets across our portfolio. The average annual speciality in-store sales across our portfolio is $1.525 million per store. By listening and acting on what our customers want, we have actively curated the mix within each centre of our portfolio.
This active curation has seen us introduce 344 new brands and 279 existing brands chose to grow their store network with us during the year. In recent years this has been seen through the shift towards experiential retail and consume on site which continues. Today 43% of the stores in our portfolio are experience and services based.
Customers continue to want a seamless shopping experience. We see this as an opportunity and believe that physical retail is – and will remain – a central part of the retail ecosystem, key to a retailers’ sales and distribution strategy. We believe well located high-quality physical retail, like our portfolio, is the most cost-efficient means for a brand to engage with a customer. It’s also difficult to replicate.
We continue to innovate in how we engage with our customer to leverage this opportunity. New technologies are providing more opportunities to enhance our direct engagement with the customer. As part of the launch of Westfield Newmarket in New Zealand, we developed and launched Westfield Plus, a mobile app-based membership program. More than 200,000 customers in New Zealand have downloaded the app since August and this has provided us insights into how we might introduce a similar initiative throughout our business in Australia.
We also continue to see increased investment in click and collect as retailers seek to optimise their store networks and close proximity to customers.
Much is made about the growth in percentage terms of online versus physical sales. However, in dollar terms, during the past three years physical sales in Australia have grown by $15.8 billion, 62% more than the online sales growth of $9.7 billion in the same period, of which over two-thirds is from multichannel retailers with significant physical store presence.
We had a busy year in 2019. We completed our NZ$790 million Westfield Newmarket development on time, creating the leading lifestyle and fashion destination in New Zealand. We are reinvesting in our portfolio and have commenced a number of projects that will improve the offer and experience for our customers. At Westfield Carindale, we’ve commenced work on a $50 million development which saw a new David Jones open in November and will include the introduction of Kmart in 2020, the most wanted retailer as far as Carindale customers are concerned.
Opening mid-2020 is our $55 million dining and entertainment precinct at Westfield Mt Druitt, adding 12 new rooftop restaurants and we have $89 million of special projects underway including the expansion and refurbishment of the dining precinct of Westfield Doncaster.
We remain focused on capital management and in 2019 we released $2.1 billion of capital through the divestment of our Sydney Office Towers for $1.52 billion and the joint venturing of Westfield Burwood for $575 million. The capital released from these transactions has been redeployed into our business.
In late 2019, we acquired a 50% interest in Westfield Booragoon in Perth for $570 million, becoming the long-term manager and developer for that centre. Westfield Booragoon’s strategic location and high-quality make this acquisition consistent with our strategy.
We are committed to running our business with a responsible business mindset and have a Sustainable Business Framework with four pillars – our communities, people, economic performance and environmental impact.
We are pleased to have maintained a high employee engagement rate of 84% in our most recent engagement survey, which places us in the top 2% of companies globally. We were recently included in the 2020 Bloomberg Gender Equality Index for the first time, acknowledging our focus on talent, diversity and inclusion in a global peer group.
Our Westfield Living Centres are regarded as valued social infrastructure and at times of emergencies, are regarded by local authorities as places of refuge and shelter. While our assets were not directly impacted by our nation’s recent bushfire emergencies, we have a role to play in the recovery process. In January 2020, we partnered with the Salvation Army to provide a cash donation of $500,000 and in-kind support through our digital screen and media networks across our platform to expand the reach of their message and facilitate further fundraising.
We have existing environmental targets for emissions intensity, waste and recycling that we are making good progress on. In addition to this, we announced in February 2020 that we will target Net Zero carbon emissions across our wholly-owned portfolio by 2030, which will become our primary environmental target. At the end of March, we will release a stand alone Responsible Business report with a full report against our public targets across our four pillars.
Looking ahead to 2020, we will maintain a sharp focus on what our customers want and stay close to their changing needs and preferences.
Our ability to better understand what our customers want has secured a strong position for our business and we are well-placed to continue to deliver on our purpose – creating extraordinary places, connecting and enriching communities.
About Scentre Group
Scentre Group owns and operates an extraordinary platform of 42 Living Centres with more than 548 million annual customer visits.
Valued at $56 billion and generating $25 billion of annual retail in-store sales, Westfield Living Centres are the first choice for retail and brand partners to connect and interact with customers. Scentre Group has unrivalled access to potential customers, with more than 65% of the Australian population living within a 30 minute drive of a Westfield Living Centre.
Scentre Group owns 7 of the top 10 centres in Australia, and 4 of the top 5 centres in New Zealand. More than 33% of Scentre Group’s portfolio generates annual retail sales of greater than $1 billion, and more than 80% generates annual retail sales of greater than $500 million.
Add comment