By Pedro Barrera
It is clear that the Covid-19 crisis will act as a catalyst for online retailing to establish itself firmly and increase the percentage of online sales in Spain more towards the rest of Europe. Certain operators will only strengthen their market share i.e. 30% increase in Nike sales online in SE Asia. eBay has allowed a one-month payment holiday to all businesses selling products via its platform. Retailers will have to work in close collaboration with logistics operators to guarantee delivery and return periods especially during April and May for which we see strong containment restrictions from European governments. Retail and logistics will be considered as an integrated sector moving forward.
Fringe CBD retail will struggle and indeed fringe CBD and neighborhood highstreet retail will see vacancy increases during 2020; retail research figures in the UK report more than 20,000 store closures and in Spain concrete estimates are yet to be published. Ground floor retail will be converted into new businesses: pick-up points for online sales, residential, start-ups.
There will be a stand-off between large retail operators and landlords in terms of rent and service charge payments. In the listed sector, Merlin Properties in Spain and British Land in the UK have been the first grant retailers (small and medium sized entities in the UK) with rental holidays to see them through the months of April and May.
Online F&B sales in Spain have increased 50% since the start of the Covid-19 crisis; although figures will bounce back once restrictions are relaxed, this is clearly a trend that is here to stay and F&B operators are becoming more equipped, especially under the current intense circumstances. We feel there is good opportunity for solid regional entities to enter into the Madrid market and take advantage of increased incentives in the short to medium term and consolidate the capital as a global reference point for Spanish cuisine and beverage.