Disruption to the retail market has been accelerated by Covid-19 and the subsequent measures that retailers have been required to put in place to comply with social distancing have arguably presented a different shopping experience. 

Nevertheless our initial findings pointed towards a return of ‘mission shoppers’ at the end of June with 83 per cent of consumers spending up to 1.5 hours within a shopping centre or retail park.  A month or so on, what’s the real picture now post the quarter day rental collection and following the mandatory introduction of face masks?

Savills manages over 70 million square foot of retail space across the UK. With retail rent collections, recorded at quarter day plus 21 days, at exactly the same rate as at March quarter day the retail landscape was not as strained as many had predicted. This reflected the positive reopening of the majority of stores with fashion retailers and jewellers, in particular, trading at or above target – a cause for some celebration against a highly challenging backdrop.

Interestingly, however, we have seen evidence that car park growth has fared worse than footfall. This could point to consumers travelling by public transport or by more sustainable means such as walking or bicycle. However, parking restrictions such as those recently seen in Edinburgh will undoubtedly have an impact on car park entries and income if this becomes more widespread.

When considering the latest introduction of face masks, 80 per cent of retailers have reported these have had no impact on their trade, albeit only 40 per cent are actively enforcing the wearing of masks in their stores.

As with all these measures it seems that for the strongest trading retailers, typically those in fashion, demand remains especially on retail parks where the drops in footfall are far lower. Despite this, footfall increased on the previous week across Savills managed shopping centres, retail parks and leisure schemes in the first full week after the introduction of face masks.  

This footfall has converted to sales but for many retailers' 2020 will be a year where it is extremely challenging to achieve even 50 per cent of budgets. However, around 30 per cent are currently in range of or ahead of (pre-Covid) budget for the year, and a further third are trading between 60-80 per cent of their full year budget.

The sector should be applauded for responding to these changes and working with landlords to pay rents where possible to drive growth post lockdown.

Further information

Contact Stephen Toal

Read more about Savills Shopping Centre Management