Retail property in Kalgoorlie-Boulder is reeling from the flow-on effects of the mining services slowdown, with empty shops in the city’s historic heart of Hannan Street reaching decades-high levels.
Kalgoorlie-Boulder Chamber of Commerce chief executive Hugh Gallagher said widespread job cuts across the resources sector had combined with a lack of consumer confidence nationally and globally, as well as the rising popularity of online shopping, to decimate retailers on the once-bustling main street.
“The retail sector is the weakest sector of business in Kalgoorlie, by the length of the straight,” Mr Gallagher told Business News.
“Because consumers could see things were quiet in other parts, they have been very conservative with their spending.
“We’ve got more empty shops in Hannan Street than there has been for decades.”
However Mr Gallagher said the retailers still trading were taking things in their stride, with many familiar with the cyclical nature of the resources sector.
“As soon as it starts to turn … it’s probably more obvious here than in any other place,” he said.
“It’s almost like a traditional thing, when gold and nickel in our part of the world takes a battering, so do retailers in Kalgoorlie.
“But I think the businesses that are here for the long haul are still committed to being here for the long haul, because they know of the inevitable cycles that come and go, and the vast majority of retailers are putting a massive effort into marketing what they’ve got.
“The retailers are putting themselves out there, because if they don’t, nobody will think of them anyway.”
John Matthew & Sons managing partner Alan Pendal said new retail developments in recent years off the main shopping strip, anchored by department store Target and supermarket chain Woolworths, had also had a negative impact on Hannan Street retailers.
“If you speak to anyone in retail they’ll admit they’re under a bit of pressure,” Mr Pendal told Business News.
“In the past decade we’ve seen Target and Woolworths establish centres with speciality shops around them, off the main street.
“They’ve become competition to main street retailers in Hannan Street, and it seems we’ll have to bide our time until we can attract some people back into those shops.”
Kalgoorlie’s residential rental market has also come under pressure, Mr Gallagher said, with vacancies rising to around 6 per cent, from previous lows of about 1.5 per cent.
Mr Pendal said vacancies at his real estate agency were not as pronounced, but nevertheless had risen to 2.5 to 3 per cent, while residential rental prices had decreased by about 10 per cent during the past year.
He said residential property sales had largely been resilient, with home sales hovering around historic levels.
“What we did see with the gold price drop in April, and a few of the mines taking the opportunity to cull staff numbers, was more people wanting to break leases,” Mr Pendal said.
“Because of the relatively small market in comparison to the Perth metropolitan area, it doesn’t take a lot of broken leases to blow that out for a short period of time.
“But that’s levelled off now, so probably the biggest impact has been rental prices have come off around 10 per cent.
“Landlords are hurting, but they have had some pretty big increases in the three years up to now.”