What happened in 2019 in retail and is that history already?
During lockdown, I have been taking the opportunity to read more. There have been some excellent articles and reports around commercial property and I found the GB Retail and Leisure Market analysis 2019 published by The Local Data Company. Their research covers 680,000 retail and leisure businesses, 400,000 independent businesses and 3,2000 GB retail destinations and in 2019 these were their key findings:
- Barbers, beauty salons, nail bars and health clubs all featured in the top 10 fastest growing categories. 782 new Barber shops opened, while 827 Estate Agents closed. All shut down during lockdown, but they will come back and they cannot be automated.
- Well located Retail Parks are being converted into other property asset classes. Consumer demand will force change.
- Increased redevelopment of retail into residential, rising from 2% in 2015 to 16% in 2019. No matter what happens, we are still massively behind on new build housing numbers. This could bring ‘life’ back into town centres.
- Shopping Centres are becoming increasing exposes to tenant CVA’s as a route to rent reductions. Shopping centres need to do everything they can to drive traffic for their tenants and tenants provide more instore experiences.
- There has been a slowdown of Leisure asset growth from its peak in 2017. Has the lockdown made us realise we don’t need a gym, we can do it all at home?
- Retail partnerships sharing occupancy costs. Two non-competing retailers sharing space and selling complimentary products. Think of petrol stations partnering with supermarkets or Iceland concessions within the Range stores. The possibilities are endless.
We still need retail and leisure property, we love to shop and get out and do things, but how we engage with both activities will change over time. How many people post lockdown, will never physically go into the supermarket again for their shopping as they now love home delivery and how many people will now run outdoors rather than on a treadmill?
New habits have not only been formed but they are close to being hardwired.
Photo by Mike Petrucci on Unsplash
