Benedict Brook, 05 October 2015

WHEN 24-hour shopping was introduced, Australians were promised a night time nirvana of popping out for a bottle of milk and a kingsize KitKat after midnight and browsing for a new pair of runners and a lip gloss at 2am.

But recent moves by retailers have suggested the around-the-clock shopping dream has turned into a nightmare, and a retail expert has told news.com.au that 24/7 shopping was “obsolete and redundant” across most of Australia.

The new CEO of retailer 7-Eleven, Michael Smith, hinted last week that the opening times of the 593 of its 620 Australian outlets, which trade 24 hours a day, was now up for discussion.

It is understood several franchisees of the embattled convenience store chain, which is in the spotlight for alleged underpayment of staff wages, have complained that many branches are largely empty after 11pm.

7-ELEVEN WASN’T ALWAYS 24/7

“The name [7-Eleven] came from those being the opening hours,” Smith told Fairfax Media. “I don’t think it’s kind of a major issue but we’re open to everything.

“You do need to consider it and we’re not going to rule anything out.”

While 7-Eleven insist 24-hour stores will remain part of the mix, the major supermarket chains have also steadily reduced the number of full-sized stores open after midnight.

And it’s not just Australia where around-the-clock retailing appears to have fallen out of favour. In July, US giant Walmart said it would shut 40 of its superstores after midnight while the UK supermarket Tesco has also begun cutting back hours at some of its 24/7 stores.

Maureen Hinton, of retail analysts Conlumino, said having shops open at all hours didn’t always add up. “It makes sense to close underused stores in the middle of the night … and if it is underused then it will not be missed by customers,” reported theGuardian.

It’s a view shared by Australian retail consultant, Barry Urquhart.

“A business has fixed and variable costs and to extend trading hours is cost effective but at a certain point of time these benefits are overcome by disincentives,” he told news.com.au.

NOT ENOUGH CUSTOMERS

Essentially, retailers have learnt the hard way that the cost of staff wages at a store open all night is only rarely offset by the amount customers are spending.

Twenty-four-hour shopping became a reality in Australia in the mid-90s when NSW and Victoria largely deregulated trading hours. In other states, the situation is far more restricted with 24-hour opening largely limited to smaller stores.

The major supermarket chains initially opened large numbers of stores 24/7, Urquhart told news.com.au, but found few attracted customers.

“The fastest growing sector of retail in the Philippines is 24-hour stores but population density is larger so you have people going down from their multistorey blocks to the convenience stores.”

In contrast, residents of Australian cities were far less closely packed together.

“You don’t have the same number of people living within an area to provide that viability,” he said.

When Woolworths opened its first 24/7 supermarket in Queensland in 2013, the retailer said, “We know there is demand for 24-hour shopping, especially in an area where there are a lot of shift workers”.

But petrol stations aside, it remains one of Woolworths’ only round the clock stores.

“Our supermarket trading hours are influenced nationwide by a number of factors,” a spokesman told news.com.au.

“Woolworths will always seek to trade during the hours our local customers want to pick up their shopping, while always complying with state and local legislation.”

FEW 24-HOUR SUPERMARKETS

Other retailers also have a smattering of stores open 24/7 including four Coles supermarkets (four in Melbourne and one in Newcastle) some IGA stores nationwide. Although this doesn’t include smaller stores attached to service stations of which Coles has 290 open round the clock. Some retailers also ramp up opening hours close to Christmas time.

A spokeswoman for 7-Eleven told news.com.au that all their stores currently opened 24 hours unless there were restrictions that prevented them from doing so.

“We are looking at everything but we would expect 24-hour trading to remain as it is a key part of the 7-Eleven offering to always be open for our customers.”

While 24 hour opening could work in a limited number of areas, said Urquhart, the lack of a 24/7 lifestyle in Australia meant it was always going to be challenge; a challenge now compounded by the changing expectations of customers.

THE FUTURE IS DIGITAL

“The future has arrived, it’s digital and a lot of retailers can’t get their mind around it,” he said.

While you can now order and track a pizza straight to your door, you still have to pop out for emergency chips, dips and chocolate bars.

“These operators need to do is sit down and say what are the measures for convenience? It’s not having your lights on and doors open 24/7 because that level of convenience is obsolete, redundant and marginal.”

Some companies were making 24-hour opening work, said Urquhart, but the rash of around the clock gyms, for instance, was possible as they were largely unstaffed and had low overheads.

However, there was one retailer operating day and night that Urquhart said baffled him. Discount department store Kmart has a small number of stores, in suburban Sydney and Melbourne and even Bunbury in Western Australia, open 24/7.

“I have never seen any research that says people want to buy a sundress, undies or a pair of socks at 3am,” he said. “There are retail miracles and that’s one of them.”

Extracted in full from News.com.au.

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