Could the internet destroy Westfield?

Shopping centre operator and property developer Westfield Group (ASX: WDC) is one of Australia’s largest companies and, with operations currently spread across just four countries, it has the potential to grow significantly. However, with the internet having such a significant presence in our lives, how does Westfield’s future really look?

The threat posed by the internet…

The internet offers an extremely convenient way of shopping for both consumers and businesses, whereby offerings from around the world are made available to us with the click of a button. Shopping online does not require you to leave the house and makes purchasing items much more simplistic as the average person’s day to day life becomes busier and busier.

On the other hand…

There are also a number of other factors that online shopping simply cannot replace. Shopping centres offer us a place to socialize with friends over meals, see new release movies that cannot (legally) be downloaded online, or to physically see and hold the products we are considering purchasing. For instance, whilst numerous online retailers do sell clothes, many consumers would feel more comfortable trying them on – seeing if it suits them, if it fits and whether they prefer item A or item B. Similarly, instead of waiting for an item that was purchased online to be shipped from overseas (which could take weeks), you have the pleasure of being able to go home with the item right away.

After years of adapting to the changing consumer trends, a number of retailers, such as JB Hi-Fi (ASX: JBH), Myer (ASX: MYR) and David Jones (ASX: DJS), have once again become profitable as they refocus their attention on selling higher margin products. As retailers continue to improve their positions and ensure they maintain a sustainable future, the future of Westfield is also looking more and more promising.

Currently trading at $11.12 per share, Westfield offers an attractive 4.5% dividend yield which complements its shareholder-friendly focus and growth potential. At today’s price, it is also valued 11.4% below its peak of $12.55 in May, having fallen along with the rest of the market in that time.

Foolish takeaway

The convenience and wide array of products offered to consumers has ensured that internet shopping is here to stay, however, that doesn’t mean that brick-and-mortar shopping is a thing of the past. Westfield is a global powerhouse in the shopping centre arena, and through growth and strategic portfolio management, it should continue to grow and give shareholders excellent returns well into the future.

Meanwhile, The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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