Seen as prime destinations before COVID-19 hit, flagship shopping centres will take a long time to attract the same number of consumers back with many shunning the locations to avoid potentially crowded areas and unnecessary travel, says GlobalData, a leading data and analytics company.
Sofie Willmott, Lead Analyst at GlobalData, comments: “Supermalls and flagship shopping centres had huge appeal among both consumers and retailers prior to COVID-19 with their variety of food service and leisure options, alongside large retail stores providing a day out destination. But many shoppers will feel that closed, restricted, or open but potentially unsafe amenities, do not warrant them visiting these destinations and will choose to shop online or at closer locations such as town centres and retail parks instead.”
Source: Data is taken from GlobalData’s survey of 2,000 nationally representative UK consumers conducted in early June.
Despite landlords implementing measures to reassure shoppers, such as one way systems to facilitate social distancing and limiting numbers entering the centre, footfall is unlikely to return to pre-COVID levels before the end of the year. Stores that many retailers could rely on pre-COVID to bring in decent revenue, will this year struggle to justify their rent costs and as a result there are likely to be ongoing negotiations between retailers and landlords. Many shopping centre owners have already seen the value of their assets plummet and their locations that this time last year would have had a more positive outlook than many other retail locations, now look to be in trouble.
Willmott, continues: “The impact of COVID-19 will hurt all retail locations with offline non-food spend set to plummet 29.5% (£41bn) in 2020. Shops that are easier to access by car or foot such as retail parks and town centres will appeal more to cautious shoppers, shifting visiting and spending habits in a different direction to what we have seen in recent years.”
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