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This story was originally published on RNZ.co.nz and is republished with permission.
Expensive rents and falling sales meant the retail sector was already struggling, the coronavirus has only compounded that.
And there is no end in sight. Under newly announced Tier 3 rules, stores will only be able to open for contactless delivery and pickup.
On Ponsonby Road in Auckland, the normally vibrant and bustling market bands are empty and “rent” signs cover several store fronts.
It’s hard for Chapel Bar’s Luke Dallow, who says many will likely remain vacant long after the shutdown ends.
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“I think when we exit Covid and go down to level 1 or above Covid entirely, even level 2, there will be some cafes and restaurants that won’t open. They just can’t afford it, they won’t be able to open
“They probably already have difficult balance sheets right now and unfortunately we won’t see them open.”
LYDIA BATHAM
Many shopping malls may not recover after a coronavirus pandemic.
Dallow said filling those stores will only be more difficult now, with the strong economic impact of Covid-19.
Unless rents are reduced along Ponsonby Road to match the financial impact suffered by businesses, other store owners will also decide not to renew their leases.
“For commercial real estate, it’s also going to be very expensive. I think commercial real estate owners should say, ‘I’d rather have someone in my building and pay less than be empty and not make money.'”
LYDIA BATHAM
Aucklands Ponsonby Road during closure.
World has boutiques in Ponsonby and Newmarket and the founder of fashion brand Dame Denise L’estrange-Corbet agrees.
She said that many retailers will likely start to move away from bricks and mortar, toward online sales where owners don’t have the power to sink a business.
“Many brands are going to restructure and look at how they retail and whether they need physical stores to do business or whether they go entirely online.”
“If you can’t afford to keep paying the rent and the landlord isn’t going to come to the party and you want your business to survive, and you have to survive differently, then that’s all you can do.”
Newmarket Business Association executive director Mark Knoff-Thomas said some of the “rent” signs along Broadway were there before Covid-19 attacked, with stores moving into the newly built mall.
“Some of the brands that left Westfield have come back and have occupied locations along Broadway and some of our side streets. And other brands that weren’t in Westfield have also come in and that’s what we expected.”
“The lease had actually worked really well before Covid-19 and some of our key sites along Broadway had been leased and were due to be installed and others will be installed once we return to some sort of normalcy.”
The companies most likely to survive were the ones that had already accepted online sales, he said.
“Our retailers who have embraced omnichannel retail in the sense that they are digital, they are social, the website, the physical experience, they have pushed their customers, they are the ones who are likely to recover very quickly.
“Those brick and mortar retailers that haven’t necessarily had a big omnichannel footprint for their own brand, I think they’re going to have some very difficult times ahead of them.”
The look and feel of New Zealand’s main shopping malls is likely to feel different for a long time, and like how people adapt to virtual meetings and digital learning: a trip to the stores could consist of opening different tabs in your browser.
This story was originally published on RNZ.co.nz and is republished with permission.
