Why is Acland St becoming “Chadstone by the Bay”?

Acland Street, St Kilda, with 7-Eleven, Subway and vacant office space - click to see McDonalds to the left

Carol Nader wrote an article in The Age on the weekend bemoaning the decline of St Kilda’s famous Acland Street. She reports there are eight shops with “for lease” signs:

The strip that used to have everything is now bereft of a newsagent and a florist. Kinki Gerlinki has shut down and the Quick Brown Fox has moved to the Balaclava end of Carlisle Street. The Vibe cafe a few doors down from the iconic Cicciolina restaurant is gone.

With the closure of “cool and quirky” fashion and vintage clothes shops in Carlisle and Barkley streets, she counts 12 empty shops in the village precinct.

Ms Nader’s main emphasis is on the current poor economic climate for retailing, but a letter writer to The Age, Maxine Hardinge, reckons the rot set in long ago. She says St Kilda “was sold to the devil 20 years ago when McDonald’s and other chain stores started the ”creep”. The morph into Chadstone-by-the-Bay has long been complete”.

Sadly, the same thing is happening in Balaclava, with Priceline, Crust, Telechoice, Kinki Gerlinki, Flight Centre, 7-Eleven, Quick Brown Fox, Subway, Urban Burger etc gradually squeezing out the independent retailers.

Ms Hardinge says council should cap the number of chain stores and favour independent retailers, otherwise “the particular flavour of the suburb – that thing that attracts people to live and shop there”, will be lost.

Like these writers, I would be disappointed to see the special character and personality of these villages fade away. I’d prefer an Acland Street “where an Italian deli sits between a Middle Eastern bakery and an antiques shop”. I’d like to think St Kilda’s cake shops will be there forever.

However the idea that a council should manage the mix of uses in a centre, as if it were a mall under its management, is an idea that – to put it as politely as I can – is well ahead of its time.

It should be self-evident that the 7-Eleven’s and their ilk are moving into these villages because there’s a demand for them. They’re attracting customers more successfully and generating larger profits than the shops they’ve replaced (or, less charitably, squeezed out). The customers of Acland Street have spoken and the chains appear to be winning.

While St Kilda has enough “hip” inhabitants to give it a cool profile, it seems those who want a village of cool, quirky and traditional shops are actually in the minority. This might seem surprising but, as the My School debacle showed, drill down below the average and most places will reveal many residents in different age, family status, educational and income strata.

Many of these people have what the writers might think of as common tastes. St Kilda has long-standing residents who have no interest in the special character of the village. It has many newcomers attracted by the vibrancy of the place but whose interests are decidedly plebeian, even bogan.

Much as I personally would love to see the diversity of places like Acland Street preserved, resorting to regulation as Ms Hardinge proposes is not only impractical, but inequitable. It would give priority to the interests of what appears to be a minority.

Ironically, the sort of transition she fears has parallels with the way many fashionable inner city areas got their “cool” in the first place. The gentrifying yuppies of the 60s, 70s and 80s profoundly changed the living circumstances of the working class populations in inner city neighbourhoods.

For example, not so long ago all those boutique hotels in places like Fitzroy and Sydney’s Surry Hills were old fashioned drinking establishments, frequented largely by older men. Gentrification brought unaffordable bar prices, unsympathetic fellow patrons, and eventually no admittance. Not to mention higher rents, noisy parties, parking problems, and more.

It occurs to me that while nothing’s certain, the only way to be really confident about protecting the special personality of a village is for the majority of the users to value that character very highly – to want to buy their clothes from the quirky shop rather than from Sportsgirl. That’s only going to happen when the majority have very similar tastes – in other words, when the population is relatively homogeneous rather than diverse. But in St Kilda, the “bogans of taste” are moving in. It’s ironic that the diversity of shops might be undermined by the increasing diversity of the population.

One strategy that could help to retain interesting shops would be to increase the supply of retail space, so non-mainstream uses could find lower rent locations on the edge of an activity centre or in second class retail space, rather than be squeezed out entirely. It’s not a perfect solution because chain stores would continue to detract from the overall “non-mainstream” character of the village, but it could help maintain retail diversity.

There’s yet another irony here though, because the same group who want to regulate the retail mix are also the group most likely to oppose expansion and/or redevelopment.

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20 Comments on “Why is Acland St becoming “Chadstone by the Bay”?”

  1. Peter Hill says:

    Another driver: rising rentals, driven by the superior income and profitability of the “chain” stores. Cake shops don’t have the turnover profit that chain merchandisers do.

    Also, the floor-space and frontage structure and mix of strip retailers have a lot to do with tenant profitability. Currently, I am seeing rising shop vacancies in the northern part of the shopping strip along Hampton Street Hampton, which has become dominated by health, beauty and hairdressing salons. These have lower earnings and their clustering in the lower rental section is leading to over-replication and thence business failure. Whereas the southern part of Hampton Street is still thriving.

  2. Interesting that the letter writer included out Kinki Gerlinki (which as The Age points out has closed). It’s a “chain” that had a total of four stores. Hardly the Golden Arches crushing the local burger van.

    This is the nature of cities. I’m sure Chapel Street was once an interesting and dynamic place but it certainly hasn’t ever been in my memory. Brunswick Street was somewhere I enjoyed hanging out until about 4 years ago, but now its pretty much Chapel Street!

    Conversely when I lived in Thornbury, that end of High Street was pretty close to dead at all hours. Now there’s the Thornbury Theatre, about half a dozen good cafes, an excellent bottle shop, a decent record store and bars starting to open up (although admittedly I’m not sure any are good yet, despite the excellent Retro Duke Box at Tago Mago).

    • rohan says:

      yes gentrification – the once working class / ordinary streets with low rent get colonised by independent minded retailers, then the suburbanites come to partake, they want something interesting, but not too interesting, then chains or at least ‘groovy chainettes’ (kinki etc) come along, the rents go up, then there’s bigger chains, and no newsagent or bank even.

      I suspect the cake shops in acland street are only there still because they own their buildings. Ive watched Brunswick Street turn from interesting cafes, bars and odd-bod shops into fashion retaining and samey looking cafes – 1 bank and 1 newsagent. All the interesting places are now at the Smith / Gertrude intersection, but I fear not for long.

  3. Richard Peterson says:

    The two controls that I would wish were included in municipal planning schemes are, firstly of design quality (an entire topic for another time, but not controllable in present planning schemes), and secondly a requirement to retain key retail uses in every shopping strip, eg: newsagent, grocer, greengrocer, chemist and butcher, as a minimum. This, I understand is currently effective in Italy. But for much of inner Melbourne including Acland and Carlisle Streets, this is too late.

    • Alan Davies says:

      “This, I understand is currently effective in Italy”

      That’s fascinating, it would be interesting to know more, esp whether the primary motivation is amenity or job support; urban or rural; one province or all, etc. My immediate reaction, though, is to wonder if this sort of market regulation is symptomatic of Italy’s present extreme financial crisis.

  4. kymbos says:

    My understanding is that Byron Bay local government has prevented ‘chain store’ fast food establishments from opening in the town. It’s a ‘command and control’ measure that can be challenged in its popularity at every election.

    Why is profitability the last word on an area’s retail space, or any other space for that matter? Would you accept the will of the St Kilda people if there was such a push at local council level, and an election to establish popular support?

    • Alan Davies says:

      I don’t think profitability is the issue, but rather whose interests are served by regulating whether chains stores can operate. I think the residents of Byron Bay are pretty homogeneous so seeing off KFC would probably be supported by the majority. Likewise, it would be hard to argue against regulation if a majority of residents in Port Phillip voted for it (although I suspect that wouldn’t be the case).

      But having said that, I find the idea of preventing businesses starting up not because of their use (e.g. clothes retailing) but because of their management arrangements (e.g. franchising) very problematic.

      Look, my views are doubtless shaped by having grown up in a place and time when the majority viewpoint was authoritarian, anti-innovation, anti-culture, and very repressive about moral issues (Qld under Joh). I know the public mood can change over time, so I look at ideas like this and wonder how it would be exploited by a Joh.

  5. kymbos says:

    Hmmm…

    “It should be self-evident that the 7-Eleven’s and their ilk are moving into these villages because there’s a demand for them. They’re attracting customers more successfully and generating larger profits than the shops they’ve replaced (or, less charitably, squeezed out). The customers of Acland Street have spoken and the chains appear to be winning.”

    By your quoted logic, profitability equals demand equals popular support. I find this logic rather a little too uncomplicated for the retail reality. And from a community’s perspective, arguing that a 7-Eleven replacing a butcher is self-evidently the people’s voice being spoken just sticks in my craw. They may be more profitable for a number of reasons (such as paying minimum wages for unskilled labour or purchasing cheap inputs to sell to backpackers) – the reasons for profitability are not inherently tied to the public good of St Kilda as a whole.

    The argument that local societies have too much influence over commercial arrangements in their areas would be a tough one to make. We agree that profitability is important, but I am less worried than you that the Ghost of Joh will rise in local councils.

    • Alan Davies says:

      There would be no chain stores in Acland Street if there weren’t customers.

      The best chance of preserving the area’s retail diversity is to expand the supply of retail space.

      (Is there some evidence to support the assumption that a butcher would be more likely to pay above minimum wage than a 7-Eleven? What is unusual or wrong with any business paying the minimum wage for unskilled labour?)

      • Michael says:

        Maybe this isn’t happening in Acland st, but large retail outlets probably do have an influence on what retail outlets exist, so I think it would be hard to argue that all retail outlets are there because of customer demand alone. I remember years ago a US cinema chain was unable to enter the Australian market because they couldn’t get space in Malls. Maybe that wasn’t the whole story, but it wouldn’t have been the first or last time duopolies colluded to exclude competition.

        • Alan Davies says:

          Was that a company named Readings, in the 90s? Rings a bell.

          The Productivity Commission made the same point in its recent report on the retail sector – companies mounting legal challenges to deter commercial rivals. Probably says more about who isn’t in centres or retail strips, though, than who is.

      • I’ll ask about butchers wages tomorrow at work, but I’m fairly certain they fall under some kind of award wage rates. I’m also fairly certain that to work at a butchers in Victoria you’ve either got to be qualified or undertaking an apprenticeship, so technically they’re not unskilled labour.

  6. Russ says:

    “Increasing the supply of retail space”… they tried that, no? To save time I’ll quote myself:

    “Ironically, the proud defenders of St Kilda’s eclectic heritage seem determined to prevent something that may slow, not hasten change. They protested the range of shops, worried about chain stores, and no doubt the clientele. When the developer promised not to allow them – a move of questionable legal basis – the protests shifted to the number. Neither complaint makes sense if residents want to protect a retail culture in St Kilda. St Kilda is an attractive place for retail businesses. The residents are young, increasingly wealthy, and it is nearby other, even more attractive, areas. Up market shops and chain stores will increasingly invade St Kilda’s streets and it is not possible to stop them pushing other businesses out of Fitzroy or Acland Street. But it is possible to create space for them, lowering rents across the suburb, and slowing the rate of change. The triangle development provides this space, enhancing, not out-competing the retail shopping strips.”

    Incidentally, it would be quite reasonable for the landowners of the strip to bind together for the joint management of owners and uses to enhance overall rents. They might get taken to court as a cartel, which would be an interesting case, but they could maintain diversity if they so wished. That they don’t is indicative that, by and large, lack of diversity and chain stores are better business.

    It really oughtn’t to be any business of the council. The probability of that kind of arrangement leading to corruption (or at the least, significant electoral interference from business) is remarkably high.

  7. kymbos says:

    It was a throw-away comment, but my point was there is a butcher’s apprenticeship, and no 7-11 apprenticeship – businesses can add to social capital in significant ways.

    My broader point was that the content of retail businesses can reflect a local area’s values, enshrined and enforced by Government rules and regularions, with the support of the public. If anyone was arguing that all chain stores should be banned without transparent public support based on one person’s comment online, we stand united in opposing that.

    If we allow profitability to rule alone, then all we will get from retail is businesses with the leanest cost structures (7-11s etc). I am not advocating subsidies for unprofitable businesses, but I can envisage a scenario in which a business with lower profit margins may be preferred by a community to another 7-11. While this contravenes rules of financial efficiency, there may be a ‘willingness to pay’ by a community for that outcome (as in Byron).

    So is this statement defended by evidence, or is it too ‘self evident’: “The best chance of preserving the area’s retail diversity is to expand the supply of retail space.

    • Alan Davies says:

      “So is this statement defended by evidence, or is it too ‘self evident’: “The best chance of preserving the area’s retail diversity is to expand the supply of retail space”

      I could’ve phrased that better – I wasn’t so much calling you to account, as seeing if perhaps there was some evidence on this point. Fortunately for me, in this particular instance, I do have evidence! See the Productivity Commissions’s recent report on retailing where it devoted considerable attention to this issue.

    • Russ says:

      kymbos, you need to look at this “at the margin” in economics terms. Retail stores without lean cost structures exist, so clearly they can exist in the right circumstances. The first 7-11 in a street is very profitable, the second has only marginal utility to potential shoppers, and is likely to be less profitable than another use. If there are 20 retail fronts on a strip then it will trend towards having the 20 most profitable shops in residence. At some point, the xth most profitable shop is the type of diversity adding low margin shop people like to have on a street.

      Similarly, rents will rise to match what the 20th most profitable shop can afford. If there were 40 or 50 shop fronts, then the probability of having space for diverse businesses is much increased. There is a reason country towns often have low-profit book and antique stores that only open on the weekend: they have relatively few residents and large amounts of extant retail space.

  8. kymbos says:

    Fair call, Alan. I’ll have a look at that PC work.

    I think the recent efforts by the residents of the City of Port Phillip to reject the St Kilda Triangle development are to be applauded. While it may have limited their retail diversity, the broader development was deemed counter to their sense of community. And good for them!

    Thanks for the discussion.

  9. Nathan Alexander says:

    Big-box retail centres are taking an increasing amount of the Australian shopping dollar at least partly because they are managed to have particular retail mixes, not just letting the next random retailer set up shop. This can sometimes work against the short-term profit of the landowner, but works to maximise profit in the long term. By contrast, the retail mix in most strip centres is totally random.

    Over the last few years a few strips have adopted an idea from the US called ‘business improvement districts’ and are actively managing their retail mix. This could include limiting or prohibiting chain stores if it was seen to be beneficial for whatever reason – but that is not something I personally would see as appropriate in almost all centres.

    Planning schemes usually prevent the conversion of ground floor building space adjacent to existing shops from converting to retail, and so prevents the lower rent uses from finding new nearby space when driven oout by higher rent retail uses. The City of Melbourne faced the problem years ago of restaurants driving most other uses out of Lygon Street. Instead of rezoning the land around Argyle Square to allow retail, it looked at restricting new restaurants from opening. This is a form of planning blight that ends up costing everyone more through higher shop rents.

    • rohan says:

      Rent control ! or Council actually purchasing some shops to at least ensure local amenity shops retained eg, newsagent, bank, post office, greengrocer ?

      if your set of shops has side streets at less rent then such places could go there, though then they may not work as no-one passes by or knows they are there (POs the exception – people will look for them).

      Increasing shop front supply should work, though if its part of a mall (see Acland Court), then strip itself looks un-diverse. If strip grows by replacing or taking over residential properties at each end or side, that could work though converted houses do make best shops – they tend to be health centres or solicitors offices (which are good to have too though).

      Argyle Sq a good idea for more shops, though ‘off strip’ – would have to be many of them for it to ‘work’. Already mots of Vict houses converted to shops at south end of Lygon – but even they are all restaurants !

      Perhaps increasing shop supply will not ipso facto result in greater diversity and lower rents after all. Im sure the St K triangle would have been provided ordinary shops (supermarket chain store ‘other; retail in the underground bit, while the above ground would have been clothing and cafes, since as a mall-style development they would have maximised rentals. Would only have been ;good’ for Acland street if in fact rent there went down, allowing a greater diversity – maybe.


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