Reopening of retail stores – what might we expect?
Retail stores are allowed to reopen from Monday and the question on everyone’s lips is what is likely to happen in terms of footfall. Are people going to shop?
Well we are expecting footfall to rise noticeably on Monday from Monday last week, and we are estimating a rise of around +30% from the week before (which is likely to realise in an improvement in the year on year result to a drop of around -58%). Part of the noticeable rise in footfall from the week before will be due to the fact that there was a weak comparable last week, when footfall on Monday declined by -5.8%, but also due to the pent up demand amongst shoppers to visit bricks and mortar stores. Footfall may well also be boosted by a proportion of consumers taking leave from work on Monday, as it will be the first time that they have been able to visit non-essential stores (other than home stores) since the start of the lock down, and in the absence of holidays they may regard this as a chance for a mini “staycation”.
One of the other key questions is whether city centres or retail parks be busier. Determining which type of location will be busier is interesting. Retail parks have been visited more than high streets or shopping centres since the start of the lock down, and given the fact they are open air, have large stores (enabling social distancing) and can be reached easily by car with open air car parking they will appear to be a clear choice for consumers. High streets will also be attractive to consumers given the fact they are external and so consumers are likely to feel safer. However, given the constraints around travel and the advice from government to avoid public transport, is it likely to be small to medium sized high streets where footfall will rise most, as they are often closer to consumers’ homes and so can be walked to.
Shopping centres, with on-site parking and controlled entry points are theoretically able to offer consumers a safe shopping environment, and if measures are implemented – and consumers made aware of them – then they will be attractive to shoppers. The constraint attached to shopping centres is that most are located within town centres, and so face the same transport constraints as large town centres. If they are able to demonstrate to customers that they have implemented measures to keep customers safe, then they could be attractive to consumers, particularly as queuing will be less susceptible to weather. Large shopping located out of town, are likely to be attractive as they benefit from the same accessibility advantages as retail parks, together with a controlled environment.
The fact is that we have already seen a steady uptick in footfall over the past few weeks as more stores have opened – footfall shifted from a year on year decline of -75.1% in the first week of lock down to -67.5% last week. In retail parks, which have benefited from the presence of food stores and home stores which opened a couple of week ago, footfall moved from a drop of -60.6% in the first week of lock down to a drop of -43.2% last week. It seems that footfall is hugely responsive to store openings, which goes some way to answering the question of whether people are in the mood to shop. Indeed, the reduction in the decline in footfall in retail parks over the past few weeks in response to stores opening certainly suggests that consumers are keen to go back into bricks and mortar stores. Footfall has improved in retail parks over the period of the lock down by around 2% to 3% each week, but two weeks ago – when homeware stores were allowed to reopen – the improvement accelerated to 8%. This data is a strong indication of the pent up demand that exists amongst consumers for bricks and mortar shopping.
Whilst shopping won’t be as exciting and free flowing as it was before COVID, the opportunity to shop at all is exciting for consumers. The past two months of lock down, with severe restrictions on our activities and experiences, has meant that what we regard as normal has inevitably been realigned, and the chance to get out of our homes into what is familiar territory and regain some normality is very appealing. The issue will be whether the experience on offer, in the context of social distancing, will be enough of an enticement to keep shoppers going back for more or whether they will migrate more permanently and in even greater numbers online.