David Fox Co-Head of Retail Agency at Colliers International commented:
“From looking at the response in other countries and retail sectors in the UK which have already opened up, the indications are that footfall will increase significantly on the UK’s high streets with the re-opening of all physical retail stores from 15th June onwards. Yet despite the fact that there could be plenty of people out there shopping, this will not necessarily translate to money in the tills. The main issue and challenge that lies ahead will be how retailers turn footfall and customer enthusiasm, into sales. Essentially today is just the next phase of a very difficult problem – the first step to recovery.
“Due to the social distancing measures and strict Government protocols that retailers need to adhere to, there will be a mismatch of customers desire to shop and businesses ability to meet the demand. The difficulty for retailers will be the logistics of the new health, safety and hygiene policies within the stores, with skeleton staffing to manage queuing and perform their sales duties. This is challenging to each individual store, but also the wider shopping environment as headcount restrictions, limitations on public transport , a widening of congestion fees and car park quotas further impact the Government guidelines.
“We anticipate that the younger demographic will take advantage of the lifting of restrictions to socialise and visit retail destinations, but not necessarily with that much spending power, while the older generation will take a more cautious approach due to the risk of exposure. Future analysis of the effects of Covid 19 and the lockdown will focus on how the last three months have heightened the move to buying online. Retailers will continue to scrutinise their cost base in order to manage costs , and for some to simply survive , and this will continue the pressure on shopping centres and High Streets throughout the UK. Consumption is the greatest driver of our economy – the last three months have brought into ever sharper focus the need to understand how we prefer to spend , and the differing dynamics of spending patterns in the wider demographic. It is accepted that there is an oversupply of retail space in the UK, as a direct result of the pandemic the changes already expected in the decades to come will be accelerated through government and private intervention.
“From a real estate perspective, a large proportion of landlords will continue to resist committing to deferring or writing off rental arrears until the effects on turnover of re-opening under restrictions can be understood. It will be unrealistic to expect those retailers who have effectively been closed since March to meet financial commitments without the benefit of normal transaction levels. This will continue to have ramifications for the months ahead, and set the template for the future of retail in the UK.”