With the government-imposed lockdown due to Coronavirus passing its first month and no clear-cut end in sight, the situation for retailers who depend exclusively on in-person shoppers is highly precarious. Though the effects of this pandemic are being felt in every industry and every household, the retail and hospitality sectors are facing unique problems that could change the way they operate permanently.

For SMEs, these threats are even more concerning, as it is believed around a fifth of small businesses could be forced to close in the next few weeks due to a lack of cash. Additionally, recent reports suggest that just 1.4% of the businesses that have applied for the government’s Coronavirus Business Interruption Loan Scheme (CBILS) have been successful. Thousands of companies across the UK, therefore, could still be in jeopardy despite the government’s assurance of help.

However, the government may yet find a solution for these worries, as new regulations are waved through almost daily to make it easier for money to get out to those who need it. In the meantime, the rapid shift to home working and delivery-only culture has presented unexpected opportunities that could reimagine the way some retailers operate.

Though restaurants have been urged to remain open for delivery only, some of the biggest names in the industry have decided to close all or almost all of their stores in the UK. McDonald’s and Nando’s have shuttered every location while Burger King and KFC have a handful of operations with a limited menu.

Many of these industry giants have also announced they will not be paying the rent on those properties that go unused for the duration of the lockdown. Though the government has assured all business owners that a non-payment of rent will not result in eviction for the next three months, this now means that the terms of rent repayment are between the lessee and the landlord. These major chains may well be able to cover the cost with ease but this could pose further issues for small businesses.

For retail property owners, many of whom are likely already heavily leveraged, the repayment terms will ultimately be down to their lenders. However, asking too much of small businesses at this time could be setting them up to fail but expecting too little could mean property owners end up seeking a bailout. To ensure the future security of the industry, property owners and retailers will have to work together and work carefully to protect as many businesses and livelihoods as possible.

With online delivery businesses becoming increasingly prevalent and the ever-present threat of the  “death of the high street” looming over the industry for years, the immediate cultural shift to online and delivery-only sales thanks to Coronavirus could well be what ends in-person shopping as we know it. Everyone from nail salons and hairdressers to flower shops and record stores are creating new and innovative ways to appeal to their customers and keep their client bases engaged. Though there will always be businesses that need a physical presence, this could inspire more entrepreneurs to start businesses from home and shun commercial property altogether.

However, though deliveries have quickly become our only consumer outlet, the end of lockdown could result in a complete swing the other way for retail and hospitality. Recovery in the commercial sector is expected to be sharp in the latter half of the year according to real estate advisors Colliers International, showing there is little doubt of success in the future. Those of us in self-isolation may also revel in being able to go outside again once restrictions have ended, which could result in a spike in footfall in the months following shops re-opening.

Though we are most likely far from the end of the interruptions caused by COVID-19, the ingenuity of business owners and the newfound respect for public places we are sure to have once it is all over suggest positive things for the future of retail and commercial property.

This article was written by RES Property Surveyors, London.

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