Auckland's first David Jones will face 'challenging' retail market, expert says
Wednesday, 28 August 2019
Australian-owned department store chain David Jones is set to enter a 'challenging' retail market when it opens its first Auckland store, an industry expert says.
The store is expected to open at New Zealand's largest mall, Westfield Newmarket, by Christmas.
The shop will be the retailer's second in New Zealand. Its first launched in Wellington in July 2016.
The retailer's arrival in Auckland comes as department stores in the United Kingdom and United States shut up shop.
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The Centre for Retail Research blamed the rise of online shopping, lack of large-scale buying power and high operating costs for the failure of traditional British department stores like Debenhams, which will close 22 of its stores next year.
New Zealand retailers were also struggling, according to the most recent Retail Radar report which said 58 per cent of retailers had failed to meet sales targets in the second quarter of 2019.
Retail NZ chief executive Greg Harford said customers' budgets were squeezed as rates, rents, insurance premiums and petrol taxes continued to rise.
'This means they have less cash to spend on discretionary shopping activity. The retail market is challenging at present.'
Harford predicted David Jones would be a 'real drawcard' for Westfield Newmarket, despite it not being open in time for the mall's launch on Thursday.
Shoppers would likely be keen to check out David Jones when it first arrived in Auckland, but the store's long-term success would depend on whether it could attract loyal customers in 2019's difficult retail market, he said.
The David Jones store will be located less than 200m from Smith & Caughey's Newmarket store.
Smith & Caughey's merchandise director Edward Caughey said the company would benefit from the opening of Westfield Newmarket as the development was expected to significantly increase foot traffic on Broadway.
A family-owned business, Smith & Caughey's has operated in Auckland for 139 years.
It was different from other department stores because the brands it stocked – including New Zealand designers – were 'more aspirational and accessible' than those found elsewhere, Caughey said.
'We are a proud New Zealand company, and this resonates with locals as well as international visitors.
'Our staff are our greatest asset and we have an extremely talented team across the board, many who have worked here for over a decade.
'These are things that our competitors simply do not have, or are not able to replicate.'
David Jones did not respond to a request for comment.