11/15/2021 | Press release | Distributed by Public on 11/15/2021 21:28
The pandemic has spared no business, with its consequences most strongly felt by the retail sector, including tenants in shopping centres, retail parks and high streets. Global real estate services firm Cushman & Wakefield examines the situation of retail tenants in its latest report "Is Confidence Returning to the Retail Market?".
The report also presents store closures by market sector. A vast majority of stores closed (81%) were in shopping centres, 13% were in high streets, and only 6% of tenants who were forced to downsize their store portfolios permanently closed retail units in office buildings. These radical decisions were driven by such factors as unprofitability and insufficient turnover (for close to 68% of companies). Some store closures, however, had been pre-planned as part of retailers' restructuring before Covid-19.
E-commerce looks set to dominate for years to come
The pandemic and the shutdown of retail stores pushed Poland's online retail penetration rate to a record high of over 11% in April 2020. The retail tenants included in the survey are firmly committed to bricks and mortar, but 51% of retailers have also decided to build or strengthen their online presence. Companies appreciate the value of e-commerce and have all reported a considerable rise in online sales during the pandemic. This marks a milestone in the diversification of retail sales channels as a safeguard against various disruptions in the future. However, 70% of tenants say that their own e-commerce networks need to grow and that they will work on it in the nearest future; 18% are happy with their online channels while the remaining 12% are not planning to go online at all. Many have decided to combine offline and online channels.
"More than half of brick-and-mortar stores of e-retailers accept returns of items bought online. This is how store operators facilitate returns so that their customers do not need to re-pack and send back items by courier. At the same time, they benefit from customers visiting their physical stores who while in store may decide to have an item exchanged for a different one or to purchase some other products," says Anna Oberc-Krzycka, Associate, Retail Agency Poland, Cushman & Wakefield.
Tenants continue to look for new possibilities of combining traditional retail with e-retailing, the latter boosting their bottom line by the month. The survey has revealed that 64% of e-stores are operated by the same businesses that run physical stores, which is leading to the aggregation of revenue from both channels by the same retailer. Most retailers already have an online store, but still see room for improvement to customer service and offer quality, delivery times and additional online services.
"The pandemic is testing brick-and-mortar retail, but is also providing it with new growth tools. E-commerce is definitely the way forward for retail, but customers' attachment to physical shopping will be of colossal importance. The psychological aspect of it has a strong impact on customers and brick-and-mortar retailing will continue to do well for many years to come given their need to feel and touch items before purchase or simply their desire for an enjoyable shopping experience outside their homes," concludes Beata Kokeli, Partner, Head of Retail Agency Poland, Cushman & Wakefield.