Westfield cinemas struggling, perhaps due to pricey popcorn

Sales have plummeted in department stores and cinema multiplexes leasing space in Westfield centres in Australia over the last six months, according the group’s half-year results. 

Department store sales are down 8.5%, while cinema sales are down 8.7%. 

Supermarkets remain Westfield’s strongest major tenant, with sales up 2.7% over the six-month period. 

Mini-majors, which include JB Hi-Fi and Dick Smith’s, suffered a 1.6% drop in sales, while turnover was down 1.3% in discount department stores. 

The poor performance of Westfield’s department store tenants come as one Australia’s biggest department stores, David Jones, continue to struggle.

In June David Jones, which has nine out of its 37 department stores in Westfield shopping centre, issued a profit downgrade with total sales for the fourth quarter of the 2011 financial year expected to be about 11% lower than earlier forecast. 

For speciality stores, general retail (down 3.1%) and homewares (3.4%) are struggling with footwear (up 3.9%) and food retail (up 3.2%) the strongest performing store categories. 

Fashion stores recorded a 1.2% increase in sales turnover.

On the back of its investments in Milan and the World Trade Centre site, the pipeline of future development work has increased to approximately $11 billion. 

Total new project commencements for 2011 are expected to be between $750 million to $1 billion. 

Over the six months to June Westfield commenced work on $570 million of new projects including a $320 million redevelopment of the Fountain Gate mall in Melbourne with remaining $250 million being spent on smaller projects across the United States, the United Kingdom and Australia.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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