SHOPPING CENTERS AND CORONAVIRUS – ARE WE GOING BACK TO THE BEGINNING?
During the last 20 years, we’ve witnessed a golden era of shopping centers in Europe, but especially on the Balkans, which was lagging during the 90s because of different geopolitical issues. Still, in its peak of progress, the retail sector has to deal with the newest, and most dangerous enemy – novel coronavirus. Ever since the WSO proclaimed the pandemic, even before shopping centers closed their doors, we’ve seen a sudden fall in sales and visits. While the trend of self-isolation is slowly pushing the consumers towards online shopping, shopping centers are forced to stand on the sidelines and wait for their opportunity. Most investors have already implemented short-term measures to survive, but for longterm survival, they will most probably need help and support of governments in the region. Since shopping in shopping centers usually means a crowded interior, we can assume that it’ll take some time before consumers go back to their old shopping habits, even when the coronavirus situation is dealt with.
The real challenge lies in keeping the local franchises, brands, and distributors alive during the time of no-sales. For this to happen, it’s required for governments of the region to help to keep the key players afloat and keep their workforce. It’s also important for governments to lower taxes on non-operational assets to lighten the damage that shopping centers can sustain.
Still, a glimpse of hope for the Balkan region is that its consumers already experienced major changes in the past 30 years, so it’s assumed that their consumers won’t be as traumatized as in the western countries. Current self-isolation and social distancing should affect people to be enthusiastic about free movement and social contact outside, which could lead to better sales of sports equipment for example.
Some of the shopping centers have quickly realized that during these harsh times they can only stay relevant to consumers by being available to the community. For example, NEPI Rockcastle has donated 150.000 EUR to fight COVID-1, while some of their shopping centers have also started socially responsible campaigns asking consumers either to stay at home or entertaining them on their channels during self-isolation.
Most of the shopping centers in the Balkans have quickly reacted to the crises and turned towards the only thing that allows them to promote their brand – sharing advice on how to behave during the crisis and helping people to pass the time until isolation is over.
At the moment, there’s no saying when the coronavirus situation might end, so it’s impossible to know the exact damage this pandemic will do to shopping centers, but one thing is certain – the longer it lasts the harder it will be for shopping centers to go back to the pre-pandemic level (not impossible though). With the help of governments with their economic measures, banks with favorable credits, and new strategies – it’s possible to expect that shopping centers will be crowded again once the pandemic ends, just like it was before March 2020.
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