Reasons (for some) to be cheerful

As we hunker down to yet another new way of life in the first full week of Lockdown 2, in what would normally be the retail and leisure sector’s busiest time of the year, I’ve been considering how accurate the blanket headlines of doom and gloom really are. Why? Because my daily discussions with a wide variety of individuals from across the industry, show that the reality is much more nuanced than some would have us believe. And that, even in the most difficult of times, certain types of retailers and leisure operators are performing better than the general picture suggests.

It’s worth remembering that since the original lockdown at the end of March urban regeneration and large-scale mixed-use property development in the UK (and across Europe) has not come to a standstill. Progress has almost certainly slowed in many cases, but there is widescale acknowledgement that the disruption we are all facing is temporary. In these schemes, landowners and landlords, if not already in discussion with potential retailers and leisure operators, are considering what types of tenants will work best for their particular location.

So, which have fared well (relative to others) since the pandemic shifted normal consumer behavioural patterns? To me they fall into two clear categories:

Resilient – retailers and leisure operators who have found ways to ride the storm by at least maintaining their current business
Opportunistic – retailers and leisure operators who have responded to consumer demand induced by the pandemic and been able to grow their business accordingly.

For me, supermarkets, convenience and value-led stores come under the former category, while health and fitness brands, home entertainment and homeware stores slide into the latter. Interestingly, this divide also reflects a fundamental split in consumer attitudes between necessities and optional extras, ie what they need and what they want.
There are also property types that have done relatively well this year: suburban locations in Greater London, certain out of town retail parks, factory outlets, pop-ups and fitted restaurants. A personal favourite of mine The Really Local Group combines the best property uses and tenants for each individual location.

What has struck me about the retail and leisure sub-sectors which are doing much better than might have been expected is how they have quickly recognised and either capitalised on or been able to speedily adapt themselves to changes in consumer behaviour.

We can all learn something from this and, while the traditional countdown to Christmas will undoubtedly be different this year, more detailed analysis of who has traded particularly successfully in 2020 could yield useful insights that will help the market to rebound and grow all the more quickly in 2021.

Article by Hannah McNamara, Co-founder of P-THREE