Modest sales impact expected from Kmart

An economic impact assessment prepared by Deep End Services has analysed the need and impact of the proposed Kmart development on the corner of Hazel Drv and Queen St.

In dollar figures, it is estimated $3.8 million in retail sales could be lost each year from the Warragul town centre, a 1.4 per cent loss of the forecast $274 million to be spent in 2020.

However, this is estimated to increase to $9.4 million, or a 3.4 per cent loss, if the proposed development includes a bottle shop.

Current retail sales in Warragul are estimated to be $259 million, the report says.

The report showed money spent at Kmart would be redirected from retail shops outside the shire rather than the town centre.

The report said analysis of the competitive trading effect arising from the proposal would be “modest and not adversely affect the operation of other centres.”

“By accommodating a retailer not present in Warragul town centre, the proposal represents a complementary rather than competitive development.

The $25 million development, outlined to Baw Baw Shire Council two weeks ago, proposes to create 292 full time equivalent jobs.

Currently zoned for a bulky goods precinct, council has asked Planning Minister Richard Wynne to fast track a land rezoning to allow retail development on the site.

A representative for the developer confirmed to council last week that Kmart and Bunnings were both “board approved” for tenancy and there was “potential” for a Dan Murphy’s store.

The economic impact assessment indicates the development aims to open in 2020.

Total retail spending in the shire in 2018 is expected to be $715.4 million which includes $388 million on food items, $282 million on discount department type goods and $44 million on other retail.

It is estimated expenditure in discount department stores is expected to increase $60 million in the next five years.

The report said sales redirected from the Warragul town centre represented only a small component and most of the impact will be associated with the redirection of money currently being spent at department stores outside the shire including Moe, Morwell and Pakenham.

The report said retail studies conducted over many years had consistently identified a market opportunity and community need for a full-line discount department store.

The Warragul and Drouin precinct structure plans identified the need for significant growth in retail provision to reduce escape spending and provide appropriate retail services to the growing community.

“The need for improved comparison shopping with the inclusion of a full sized discount department store has been recognised for many years.

“The former Bonlac butter factory site has been acknowledged as a possible site within the town centre location, but development of this site has not eventuated notwithstanding interest from prospective tenants,” the report said.