Black Friday signals retail's evolution, not its decline

While Australians don't celebrate Thanksgiving, we have wholeheartedly embraced the Black Friday and Cyber Monday shopping frenzy. This year's event is expected to provide a solid boost to December quarter retail turnover, offering compelling evidence that reports of retail's death have been greatly exaggerated.

The conversation around these shopping events typically focuses on the shift to online sales. Over the past three years, November has consistently seen online activity spike to represent around 20 per cent of non-food retail sales, driven by Black Friday deals as traditional retailers enhance their digital offerings and pure-play online stores compete with aggressive discounting. For those predicting the demise of physical retail, these numbers might look like validation.

However, consumer behaviour during these peak shopping periods tells a different story. The supposed battle between online and physical retail is revealing itself as a sophisticated ecosystem where both channels reinforce rather than cannibalise each other. Customers research products in-store, compare prices online, then return to centres for the experiences retailers are creating specifically to drive engagement during these crucial trading periods.

Shopping centre operators and retailers understand this dynamic. The significant investment in Black Friday activations, experiential elements, and in-centre events is designed to drive foot traffic. Many of those customers might complete their transactions online, but that doesn't diminish the value of the physical location. The store visit drives brand awareness, product discovery, and ultimately sales, regardless of where the final transaction occurs.

This evolution is driving strategic store consolidation rather than retreat. Retailers are consolidating their footprints, moving to better locations, and investing in flagship experiences rather than maintaining extensive networks of transactional stores. This represents sophisticated capital allocation focused on maximising returns and creating destinations worth visiting.

The property market has recognised this transformation. According to MSCI, retail has emerged as the standout performer in commercial property in the year to September 2025, delivering 8.2 per cent total returns in the latest quarter, comprising 6.0 per cent income returns and 2.0 per cent capital growth. Sub-regional centres are leading at 8.8 per cent total returns, while neighbourhood centres posted 8.3 per cent returns with 2.5 per cent capital growth.