Cause for concern- Newcastle’s failing retail industry

Concerns regarding the economic structures and feasibility of Newcastle have ranked highly in the minds of many business people as the cost of living increases, and business sales decrease.

Newcastle may seem to be attracting investors in a number of areas, but how is this directly relating to the economy of Newcastle?

A trend has emerged within Newcastle, as more independent stores close their doors.

Speaking to business owners, the consensus about the closure of many stores is that the market is overly traded.

What does this mean?

To put this idea into perspective, a small survey was conducted on the section of Allen Street between Murchison and Scott streets.

In this section alone, there are 11 clothing retail stores. The stores are situated side by side, selling the latest in fashion wear, formal wear and uniforms and targeting the same market in a section of the Central Business District with a street access of less than 300 metres.

Take the entire CBD into consideration, and one can begin to understand the scale of the over-traded retail industry of Newcastle.

“How can we compete with all of these businesses? Between the foreign nationals with their cheap items and the large corporates with their massive buying power, it is us, the independent entrepreneurs, who are being cut out of the loop,” said a businessman.

Other gripes from the retail industry are hawkers, both legal and illegal.

Businesses believe the hawkers devalue the CBD as many of them allegedly attempt to sell counterfeit or stolen goods.

“This is a real problem. What are we supposed to do? We cannot survive like this,” said the businessman.

Business statistics suggest that although prices for goods have increased, business is stagnant.

In a world where ever-increasing petrol prices directly correlate to the cost of living, the shocking reality is that many retailers are no longer making a profit.

Mayor, Afzul Rehman recently commended business people who took the plunge in becoming entrepreneurs.

“Many young people try to start up their own business, but when they don’t see results quickly they pull out. This is not how it should be. Businesses only really start making money after the first few years. This is how business works; they have to be patient” he said.

According to Portfolio Councillor of Development and Planning, Matthew Shunmugam, many people agreed that this statement rings true.

“It becomes harder to condone the actions of fledgling business people when institutions that have been in the industry for decades, are now closing their doors,” he said.

Cllr Shunmugam found the number of well-established institutions that had closed down in recent months shocking.

“Industrially, Newcastle is growing. This supplements Newcastle’s economy, creating more employment and spreading more money through the town, however, we have to look at how much of that money is actually staying in Newcastle. We have to look how to stop the CBD from being over-traded, and take a firmer stance on the policing of illegal businesses in town.”

With this in mind, Cllr Shunmugam promised to arrange a meeting to investigate the current stability of Newcastle’s economy. The factors surrounding the capture of new investments and sustaining the old ones will be analysed, in an effort to stimulate local economy.