Anyone who doubted the future of bricks and mortar retail has received a powerful response from shoppers wearing face masks and diligently using hand sanitisers in stores.
COVID-19 has created new inconveniences for shoppers, so you would think it might be easier for them to stay at home and place an order online. However, it seems that is not always the case.
Why? Quite simply, people like buying things and they want to enjoy that process.
This was my view before the outbreak of COVID-19, and it is even more so now. In addition, we are seeing evidence which suggests that when people do go out to shops they want to make that trip count and are spending more per visit.
Proof that people will continue to go shopping could be seen from the queues that formed outside when non-essential shops were able to open their doors following lockdown, and we will probably see such queues again when non-essential stores that are currently closed open again on April 12.
Enjoyable experience
These queues also highlight the fact that people want to have an experience when they go shopping.
It doesn’t matter whether that experience involves the excitement of being one of the first to go into a shop that has been closed for weeks or months. Or if it simply involves the convenience of being able to get out of the car and do some shopping, have a coffee, shop some more, and then have some food and watch a film.
What matters is providing a positive experience for shoppers. Those bricks and mortar retail locations which achieve this will be best positioned to cope with the challenges that now lie ahead, notably the ever growing influence of the digital world which has been accelerated by lifestyle changes resulting from COVID-19.
Hence, the most successful retailers will have both an excellent online and physical presence. In short - good bricks lead to more clicks!
Excess retail space
Even before COVID-19, excess retail space was clearly an issue in the UK. This has now been exacerbated by the virus, and there has been a dramatic increase in the amount of subprime retail properties that are empty, or are being converted to other uses such as residential and offices.
These changes will happen at some speed, particularly given the recently unveiled new use classes. In the short term it will be a more brutal experience than the gradual change that had been taking place before COVID-19, but in the long term it could be an effective way of addressing the fact that this country has too much retail space, much of which is not fit for purpose because of space limitations or as a result of being in a poor location.
People have been literally voting with their feet as to what is a good or a poor location in post-COVID times.
Recent figures from the Springboard UK Weekly Footfall Index have shown that since the end of the first lockdown, shoppers have been favouring out of town retail parks over shopping centres and the high street. This is not unexpected as retail parks offer easier, safer, and more socially distanced shopping – exactly the sort of experience many people are seeking.
Changed lifestyles
In the current lockdown retail warehousing footfall is 30 per cent lower than before the pandemic in February 2020, according to recent figures from customer activity specialist Springboard, but high street and shopping centre footfalls are 65 per cent down – reinforcing the learnings from the lockdowns last year that retail parks are the destination of choice at the moment and this differential will remain when we return to the post-vaccination world.
But this doesn’t mean towns and city centres are going to become deserted. Instead, there will be a migration from traditional retail-only areas to mixed uses better suited to the changed lifestyles of modern shoppers. Empty units will be used for residential and experiential purposes such as gyms, yoga studios, cafes, and nurseries.
In addition, some local high streets are being ‘rediscovered’ and evolving after the COVID-19 lockdowns. Springboard research shows the rise of 'multi-functional' towns, and longer-term changes in footfall with more people wanting to live in urban areas (less commuting) but with access to good local facilities and green spaces. This could lead to a re-think of how towns are seen and classified.
Experience-led
The move to mixed-use is very much in keeping with the advice that the retail team at Colliers has been giving to clients, including at Regent Arcade in Cheltenham (pictured above), where we have agreed terms with the up-market Tivoli Cinema. Our client here is keen to move away from a pure retail offer and wants to provide a mixed-use, experience-led scheme which will attract high levels of footfall for all the future tenants. In Stratford-upon-Avon, we were involved in a scheme to re-purpose the former BHS store with cafes and restaurants at ground floor and a hotel on the upper floors.
In the long term, a shift from predominantly retail uses to a balance of retail, leisure and residential uses will bring a new vibrancy to town and city centres, and this will be good for local economies and for the national economy.
* This is an updated version of an article that originally appeared in the Winter 2020 issue of Spotlight, the magazine produced by the Bristol office of Colliers.
About the Author
Nick Turk has worked in the property industry for over 25 years, dealing with a wide variety of property types such as retail parks, cash and carry, restaurants, supermarkets, and offices. He is a specialist in all aspects of asset management for a variety of clients, and concentrates predominantly on the retail park market, undertaking rent reviews, lease renewals and re-gears, as well as new leases.
To get in touch, please email nick.turk@colliers.com
