With non-essential businesses, including retail stores, gyms, hairdressers and beauty salons, recently reopening their doors after a long period of closure during lockdown, many companies are looking ahead to what the future may bring across all industry sectors. The retail sector in particular has been hit hard by the Covid-19 pandemic, with closures of bricks and mortar stores speeding up the demise of the British high street and seeing customers invest more in online shopping.
As specialists in both commercial valuation and residential valuation, our property experts have acted on the behalf of many landlords, investors and purchasers looking to get a better handle on their property assets during this difficult time.
Our work within the retail sector has been particularly prominent as our specialists use their expertise in commercial valuation and residential valuation to help retail business owners survive and thrive in the post-lockdown landscape.
In this blog post, we take a closer look at the impact of Covid-19 on the retail industry, and how it’s likely to affect both commercial and residential assets located within or near to retail hotspots.
Essential and non-essential: two very different stories
Since the initial national lockdown, there’s been a clear divide within the retail industry. The classification of essential and non-essential retail has been the difference between profit and loss for many businesses, with some prospering from lockdown restrictions and social distancing rules, and others faring far worse.
Non-essential retail stores were closed on 23rd March 2020 and whilst they enjoyed a grand reopening in June, further restrictions and closures have hit non-essential businesses hard.
Non-essential retailers located in Tier 4 areas were for example forced to shut during autumn to contain the spread of the virus. Further lockdowns in England (during November and December 2020, and from 5th January 2021 to the present day) meant large scale closure of non-essential retail. With this, footfall dropped dramatically. The surge in online shopping may have helped many, yet smaller businesses and those with less of an online presence continued to suffer immeasurably.
It’s not all doom and gloom for the retail sector however. Those lucky enough to be classed as ‘essential retailers’ have seen profits rise throughout the pandemic. All major supermarkets, including Tesco and Morrisons, have seen profits surge during the past 12 months. DIY stores B&Q and Screwfix also reportedly returned millions in Covid furlough pay due to increased sales and profits during this period.
Amazon has been expanding rapidly throughout the pandemic too, with UK sales increasing to £13.73billiion and the internet giant creating an additional 7,000 jobs to meet demand.
The new normal for the retail sector
With Covid-19 restrictions lifting week-on-week, and most recently, non-essential stores permitted to reopen to the public, our commercial valuation and residential valuation experts predict a brighter future for those impacted negatively by the pandemic. But what does the ‘new normal’ hold for retail businesses and consumers?
Covid-19 has affected consumer behaviour no-end since the first lockdown, with the uncertainty caused by the pandemic prompting shoppers to re-evaluate previous spending habits. Most cut back on spending during the lockdown periods, others reminded undeterred by the virus, whilst some invested more in essential purchases rather than non-essential buys. Our commercial valuation and residential valuation specialists found that these changing patterns had a direct impact on the retail sector not just here in the UK but throughout Europe.
Consumer trends saw essential business profits surge. Another trend – the shift towards online shopping – resulted in consumers purchasing items online that they would have previously purchased in store, meaning essential and non-essential retailers based offline lost vital business.
What the future holds for retailers
With the reopening of non-essential retailers comes readjusted consumer expectations, especially when it comes to ensuring a safe shopping experience. How well retailers perform on this front could have a lasting impact on reputation.
As our commercial valuation and residential valuation experts discovered businesses that fail to meet these expectations run the risk of losing the trust and confidence of their customer base. This is likely to impact chances of future business success.
It is now up to retailers to reimagine the customer journey to not only uphold the highest standards of safety. Extra efforts will need to make up for the shortage of interpersonal interaction that’s so important to some consumers (such as millennials and elderly customers) yet could be missing due to the use of masks and social distancing.
It’s not just their relationships with consumers that retailers will have to work hard to maintain post-lockdown. The pandemic and Brexit highlighted a number of supply chain issues for many companies. By shriving for simplicity and sustainability however retailers can shorten supply chains to provide an even better service to their own customers, even when negotiating post-lockdown life.
Looking after your retail assets post-lockdown
If you, like many businesses, are looking to become a more digitally facing brand, then we can assist you with your transition. As experts in commercial valuation and residential valuation, we can help you prepare your assets for the next phase of your business journey.
We provide commercial valuation and residential valuation services for landlords and investors, including those who own specialist properties like public houses, petrol stations, nightclubs and restaurants.
If you are the owner of a retail business wishing to expand and purchase a new premises to grow profits post-lockdown, our commercial valuation specialists can assist also. Our Chartered Surveyors are part of the RICS Valuer Registration Scheme, which means any commercial valuation or residential valuation we undertake is of the highest quality, professional and independent.
To find out more about our commercial valuation and residential valuation services, please contact us today.