The first day of the ICSC Retail in the Age of COVID-19 virtual conference streamed online as speakers discussed the current state of the industry and how much permanent damage there might be following the pandemic. There was also a focus on how retailers such as Walmart and others are navigating today’s retail landscape.
Here are some main takeaways from day one of the conference.
- Since the pandemic’s arrival in the U.S. in March, around $190 billion in retail sales have been lost and $54 billion in rent has gone unpaid, said Betsy Laird, senior vice president of global public policy at ICSC.
- There is an acute focus on rent collections as the key performance metric, but Richard Hill, managing director at Morgan Stanley, thinks that is misguided. He said, “the worst is behind us and it’s hard to believe that things could be worse than they were in March, April and May.”
- In addition, many companies filing for chapter 11 bankruptcies did not have strong balance sheets going into the pandemic, said Lorraine Hutchinson, managing director of U.S. equity research at Bank of America securities. She added that it’s a misconception that people will never want to go back to shopping in store.
- Since March, ICSC has been conducting bi-weekly consumer surveys to monitor general sentiment and perceptions about shopping. said According to the latest results, almost 50 percent of those surveyed believe the economy will improve in the next 12 months, while a majority of respondents also believe businesses should be open in their states, said ICSC president and CEO Tom McGee.
- People are preparing for a second wave of the virus and consumers are more mindful of their spending compared to pre-pandemic, McGee added.
- If Congress does not pass another fiscal rescue package, Mark Zandi, chief economist at Moody’s Analytics, expects the economy to go back into a recession by the end of the year.
- On a brighter note, on the other side of the pandemic, Zandi expects the economy to “kick back into a higher gear,” as there is a lot of “pent-up consumer demand, particularly for services.”
- In addition, some sectors, such as furniture and discount retailers, are especially thriving in the current environment, said McGee.
- Supply chains have been one of the biggest challenges for retailers, especially earlier in the pandemic, but they have mostly adapted and are faring much better now, said Judith McKenna, CEO of Walmart’s international division.
- Landlords and tenants are all asking for higher levels of cooperation, said Brendan Wallace, co-founder and managing partner Fifth Wall Ventures. He said this crisis has displayed a tenant and landlord’s success is “so intimately connected,” particularly in the retail sector.
- For retailers, location is beginning to be much less important than their merchandise offering or brand, and landlords are starting to get that, said Wallace. He expects that retail landlords will become more focused on how a specific type of tenant can attract other tenants to their center and picking the right brands to achieve that.
- A common theme throughout the first day was the acceleration of certain trends because of the pandemic, especially curbside pick-up and e-commerce. Although foot traffic has gone down at bricks-and-mortar stores, consumers are still shopping.