We could be catapulting into a new depressing era for retailers and retail workers…
We brought you the news last week that Intu, who run The Trafford Centre and The Arndale Centre, look set to call in the administrators which unfortunately they now have. Meanwhile, plenty of High Street names and shopping centre favourites are beginning to crumble like the last piece of bread in Upper Crust…
Obviously, there are huge repercussions at the bottom of the chain, with hundreds of thousands of jobs at risk, if they’ve not already gone that is, but the crisis affects all stakeholders from top to bottom, and commercial landlords are up there with the hardest hit.
You just have to look at the latest statistics to see why…
Only 14% of £2.5 billion rent due this week was paid by UK retailers.
Perhaps we’re not catapulting into that new era after all…
…maybe we’re already there.
All non essential shops were allowed to open recently, with a further easing of the lockdown coming this weekend, unless you’re in Leicester, but it might all be a bit ‘too little, too late’.
By and large, shoppers are still using online platforms, and whilst the queues outside Primark might convince you otherwise, footfall is nowhere near what it would ordinarily be.
This is a good thing, of course, as it means that most of the nation is listening to the calls to continue with social distancing for now, but for retailers and their employees, it could be the beginning of the end.
We’re not looking to be a harbinger of doom here, but it’s time to get realistic. If Pret-A-Manger is telling its landlords that it’ll only be paying 30% of the next month’s rent, as that’s all the cash it has, we know we’re in big trouble.
Smaller chains and independents will struggle to make rent too, even with the rallying cries of their communities getting behind ‘Keep Us Open’ campaigns from Brighton to Buckie. That said, we actively support many of those campaigns and we applaud anyone trying to help.
There are some companies who could pay their rent, it is suspected, but are choosing to use the mask of coronavirus as an excuse. This just makes the situation worse for everyone else, and we would encourage all companies and tenants who can pay their rent, to pay it as soon as possible.
Evictions bans have been vital lifelines for so many, but just as we have seen in the residential sector, there have been more than a few examples of companies taking advantage. It always happens, unfortunately. Maybe we were just hopeful that a global crisis on this scale wouldn’t have been viewed as an opportunity to get away with things, as it so blatantly has.
Whatever happens, this hole is going to get deeper before anyone gets out.
Landlords are stuck, in many ways.
If they evict their tenants, who will take their place?
If they continue to show leniency, when (if ever) will they receive their money?
The whole country will be watching what happens with the likes of Intu very carefully, and maybe even using it as a barometer for what should happen next, everywhere else.
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