By: Chris D. Prins, Colliers International
2020 was quite the year to be in the retail and restaurant industry. Covid-19 had an impact on everyone, especially the restaurant and retail world. Looking back, it was something that many business owners, employees, and patrons could never have imagined. A virus which has had an unforeseen domino effect to force shutdowns, restrictions, and limitations on this industry. Everyone in this line of work was forced to adjust their line of work and unfortunately some closed their doors for good.
Retailers will try to make it through the holiday season, which in the past has been such a profitable time. Some of the projections are that nearly 60% of retailers and restaurants closures will be permanent (Kreznar). Those business which have remained open have forced many operators to defer their rent payments and landlords will have to make the difficult decision on whether or not they continue to be flexible on payments or if they should recapture the space and start the process of looking for new prospects. As we look towards the beginning of the new year, we are undoubtedly going to see a rise in vacancies occurring in Q1 and Q2. Many of those vacancies will be the larger spaces and in-line spaces will be difficult to release as many retailers prior to Covid-19 had begun to recognize that they did not need as much space.
While the numbers continue to grow for bankruptcies and closures of businesses there have been several businesses that have thrived during this period. Essential businesses who remained open throughout the pandemic have seen record sales. Walmart, Target, Dollar General and many other big and medium box retailers often face the difficulties of empty shelves due to a strong demand. Restaurants with drive-thrus also saw strong sale volumes even when forced to shut down their dining areas. Uber Eat, Grub Hub and other delivery service apps become widely used as dine in options were at limited capacity.
As we progress into 2021 there are a lot of unknowns, but the one thing remains, the resilience of the American people. There will be business which fail and go under, but there will be those who learn from 2020, thrive in 2021 and the years to come. This year was one that no one anticipated, and it will surely impact how businesses move forward from this moment.
Kreznar, Christian. “Small Businesses Are Closing At A Rapids Pace, With Restaurants And Retailers On The West Coast Among The Hardest Hit”. https://www.forbes.com/sites/christiankreznar/2020/09/16/small-businesses-are-closing-at-a-rapid-pace-with-restaurants-and-retailers-on-the-west-coast-among-the-hardest-hit/?sh=67bbeae25033