In the last Northern Insight, Mike kindly published a blurb about me celebrating 40 years in commercial property. It does mean that I have been around longer than most in the profession.
Which is why when COVID 19 hit us, and the government took all of the extensive and drastic steps they did, many people asked me: “What did you do last time?” Well, even for me and most of my generation, there hasn’t been a “last time”. This has been a first for everyone. But now as we slowly emerge from the worst effects, it is clear everybody had to look at life in a different way.
Obviously consumers have adapted very suddenly two major changes – an almost cashless economy and a huge swing to online purchases (online sales grew from 19.1% of total sales to 33.4% between January and May this year, and of course many people were paying by card in physical shops as well). Both of these, and especially the second, have huge ramifications. We have seen the collapse of retailers such as Oasis/ Warehouse and Cath Kidston and restaurant chains are downsizing their operations on a unprecedented scale – witness Zizzi, Carluccios and Frankie & Benny’s. Of course Intu, the owners of Eldon Square and Metro Centre, fell into receivership in June. Undoubtedly there will still be a demand for shops, because some items are more “touchy feely”. People want to smell perfumes and aftershaves, and feel the quality and fit of clothes. They still want to look at the cuts of meat and look at the actual size of ornaments to see if they would fit in their homes. But if retailers sales volumes fall, so must rents.
Landlords need to be prepared for a downturn and work with their tenants to get the best for everyone in this “new world”. ww
