Retail Activity Slows, Companies Adapt to Change in Creative Ways
The second quarter of 2020 experienced 69,320 square feet of negative absorption in the multi-tenant retail market, most of which have come as retailers have filed for bankruptcy or shut down due to the effects of the novel coronavirus on the global economy. Previous to the pandemic we had been tracking a gradual shift away from shopping malls as retail hubs, and now with major names including J.Crew, Chuck E. Cheese, Neiman Marcus, Brooks Brothers and J. C. Penney filing for Chapter 11 bankruptcy, the shape of the retail market is shifting with each passing day. Additionally, restaurants have been hit hard and have had to rapidly pivot from strategy to strategy to follow changing state guidelines.
The businesses that are thriving are those that require minimal client contact. E-commerce giants Amazon, Walmart and Target have done well with their online/app services, and they’ve pushed curbside pick-up to the forefront of their business. Grocery store chains are performing well too, though also frequently understocked due to changes in consumer buying habits (example: a sudden lack of toilet paper). The food delivery business is seeing an uptick in sales as homebound consumers used delivery services to get meals that they didn’t have to cook. Socially distant deliveries have become a necessity for these companies, and we have seen the advent and rise of contactless delivery. Restaurants that had not offered takeout previously have begun to do so to stay afloat, and drive-thru fast-food companies have also remained busy. Some restaurants have begun to mimic the success they’ve seen in grocery and liquor stores by selling meal kits, bulk ingredients and alcohol.