The retail environment and the world economy remain in a state of flux. As local communities across the country “shelter in place” and all businesses deemed “non-essential” close their doors, the shopping center sector has been thrown for a major curveball. Essential retail is thriving as “daily need” uses remain to be open and busier than ever. Grocery stores are noticing a 50-100% uptick in business, drugstores are not able to keep products on shelves and big box retailers such as Target and Walmart are witnessing more foot traffic than ever before in history. Essential need retailers are hiring to meet new demands. Walmart is hiring 150,000 employees, CVS (50,000), Amazon (150,000), and Dollar General (50,000). While overall fundamentals to the sector remain strong, our expectation is that the market will bounce back as soon as the coronavirus is contained.
As circumstances are mandating people to “shelter in place”, more and more consumers are shopping online then ever before. The retailers that have invested in omnichannel infrastructure are the ones who are witnessing the biggest return on investment. Retailers that have not yet setup their platforms for omnichannel are at a major disadvantage which could have dramatic impacts to the long-term viability of their businesses. This does not come as a surprise as omnichannel is known to be the core ingredient for future success in retail. Grocery delivery is very popular during these times and online order, pick up in store remains to be used by more consumers now than ever before. In the past, majority of consumers had not pre ordered and picked up groceries, this now is a very popular function as people are inclined to avoid going inside the store if possible. Consumer buying patterns will continue to change!