The retail market was one of the hardest hit by the outbreak of COVID-19 and subsequent social distancing and travel restrictions. This proved true in Shanghai as retail sales fell 20.4% year-on-year (YoY) in the first quarter of 2020 on the back of the city lockdown and temporary store closures in response to COVID-19. Additionally, no new supply launched onto Shanghai’s retail market, and the launch date of future projects remains uncertain. Many stores in Shanghai were forced to close for a month to two months, either in response to government measures, staff and customer safety concerns, lack of business, cost-cutting or staffing shortfalls.

Many retail businesses run very tight ships, with high costs and profit margins continually squeezed. Small-and medium-sized enterprises, in particular, might only have a few months operating capital available. Catering and accommodation sales fell 42.4% YoY in the first quarter of 2020. Most restaurants, even ones with higher unit prices, introduced food delivery services to support turnover. On the other hand, retailers like supermarkets saw revenues increased significantly in response to home quarantine measures, while general retail brands, fitness centres, education intuitions and training companies utilised online platforms to offset lost income from physical stores.