Today, our CEO Peter Allen gave the following address at our 2020 Annual General Meeting.
Thank you Chairman, and good morning everyone.
I too would like to thank those securityholders for their flexibility as we manage our communication and engagement with you during this exceptional period.
I would also like to thank our team who have remained focused and resilient throughout what is still a very difficult period.
As the Chairman noted, our 2019 financial performance was reported to the market on 18 February 2020.
Our 2019 results demonstrated our customer-focused strategy was delivering results.
Annual customer visits across our portfolio of 42 Westfield Living Centres in Australia and New Zealand was up 12 million to 548 million customer visits in 2019. In-store sales on our platform exceeded $25 billion and continued to grow during 2019. More than 7.5% of total retail sales in Australia take place in our Westfield Living Centres.
Despite strong operating results in January and February, our business context and operating environment has shifted as a result of the reactions to the COVID-19 pandemic.
Importantly, all our 42 Westfield centres remain open within Government guidelines in Australia and New Zealand.
Due to the health measures and business trading restrictions, our centres look and feel very different to what they did in early March.
Some of our retailers have been required to close to meet government requirements and unfortunately some have voluntarily decided to close.
We estimate across our Australian portfolio today, approximately 39% of stores are open and in New Zealand, only designated essential retailers are open.
As we stated in our recently released 2019 Responsible Business Report which is available online – our centres are regarded as social infrastructure.
The Australian Government regards us as ‘public transient places’ and ‘essential activities’.
This is because our Westfield centres include supermarkets, grocery stores, food markets, retail stores and medical centres.
We acknowledge it remains a very difficult period for our business and many of our retail partners.
We continue to work our way through the economic shock with our retailers and their banks, in particular, our small to medium sized retailers or ‘mum and dad’ retailers who are most vulnerable.
As the Chairman mentioned in his address, we as members of the Shopping Centre Council have been working co-operatively and constructively with national retail groups to put forward to government a Small Business Retail Leasing Code of Conduct to help our industry respond with cashflow support with a targeted focus on those businesses who are most in need.
I am pleased to note that the code we negotiated with the national retail groups will be adopted in principle and is to be legislated by Australia’s various States and Territories.
Importantly the Code retains our ability to negotiate commercial outcomes with our SME retail partners on a case-by-case basis whilst balancing a fair and proportionate response.
It aligns with our objective to balance the needs and responsibilities we have to a range of stakeholder groups – our customers, our brand and retail partners, our people and, of course, our securityholders.
Scentre Group will immediately adopt the Code principles and look to implement similar arrangements in New Zealand for affected small business retailers.
We are extremely conscious of our broader community responsibility as a leading Australian company and brand.
It is going to take some time for us to work through our conversations with all our SME retail partners but rest assured we will do it with the empathy the community expects of us to come to a suitable commercial agreement and continue to foster our relationships with our retail partners.
We have communicated regularly with our stakeholders on how we are responding to the pandemic. Media statements are released onto our website to ensure our position is transparent and we contribute to a balanced conversation during this period.
Our team receives regular updates. We are very proud of their resilience in the face of such challenging times. We are focussed on maintaining to the greatest possible extent the employment of our people.
I would like to thank all members of the Scentre Group team for their efforts especially during these early months of 2020.
In particular I would like to express my thanks to our people in leasing, customer relations and finance who are having very difficult and understandably emotional conversations with small retailers.
I also want to express my thanks to our customer experience teams for their extraordinary capacity to adapt to health and hygiene precautions and support our customers and retailers through this period of social and physical distancing.
I would like to acknowledge our New Zealand teams who were required to adjust much more rapidly to stricter trading conditions as a result of the level 4 COVID-19 Alert.
Our centre based and support office teams who are in roles that can be performed from home are working remotely and will do so for the foreseeable future and in line with health advice and government measures.
I would like to acknowledge and thank the Board for their support and guidance to the senior management team during 2019 and in particular, these times.
I am very encouraged to see a collaborative effort across our team to bring the future forward by setting up a new drive-through Click and Collect service called Westfield Direct.
We have launched this across all Australian Westfield centres providing another opportunity for our retail partners to connect with the customer.
Our team developed the technological and operational platforms in under two weeks demonstrating business agility and innovation in the most challenging of times to deliver for our customers and retail partners.
We are now supporting over 200 restaurant and cafe brands to get their product to customers in as easy and safe a manner as possible.
A further 100 fresh food partners expect to join Westfield Direct in coming days and we are working on expanding beyond food to other product categories.
We are looking forward to this service developing further. I would encourage you all to try this out and order and pick up from your local Westfield centre. Details are on your local Westfield website.
The last month has been an exceptional period in the life of our nation, our industry and Group. It is worth noting it has followed a bushfire emergency which impacted on significant parts of Australia during late 2019 and early 2020.
Whilst the bushfires did not directly impact our assets, we were very pleased as a leading Australian company to support The Salvation Army during this period and donate $500,000 cash and provide significant in-kind support to them. We look forward to more engagement with the Salvos throughout 2020.
We are a responsible, sustainable business and are continuing to approach these challenges and our business with Our Purpose front of mind – ‘creating extraordinary places, connecting and enriching communities’.