The future of physical retail stores in NJ
What is the future of physical retail stores in New Jersey (and beyond?)
Will shopping ever be the same?
What about all this “fear” of the big bad boogie monster? When you look around at the real world – the observant person does not see a pandemic. But if you look at the “news” or “official reports” they tell a grim story of death and despair.
It does not seem like that to us.
Of course, then you have the “scared” public. Complying with mask regulations. Sanitizing EVERYTHING.
How will that affect things?
What if “they” (TPTB) say things are okay now? What percentage of the people will believe that? Not sure – but we know people that will be FOREVER afraid of “infected” packages and so on. I can bet that many people will wear masks from now on – just like Japan.
But how does that impact businesses?
Oddly – liquor stores are crushing it – 100% increase in sales in most cases.
However, regular retail stores are seeing an inverse drop – often up to 50% or more. Especially those deemed “non-essential!”
CHANGING BUSINESS MODELS
Obviously – the landscape will be different for the foreseeable future. Our concern is the status of these retail properties. Because there are several factors at play.
- Property owners. And the rents they receive.
- Tenants – they must factor overhead – as well as per-store revenue.
- Customers – Most people reduce expenditures if prices go up significantly.
So, there will obviously be some “losers” in this equation. The question is WHO, or how many?
- Should property owners just bite the bullet and drastically lower rents to keep or even attract tenants?
- Should businesses cut their profits provided they do not lose money?
- Should customers expect to “pay a little more?
Perhaps it is a combination of nip and tuck among all three factors – but keep in mind – the customers are the ones that ultimately open their wallets. And with ONLINE competition – it is a tricky path to go down. This crisis certainly is helping companies who dominate online – as well as carriers like UPS and so on.
And this is assuming things eventually get back to normal. We have a strange feeling (unless bombshell information comes out of the oval office), that this drama will linger for longer than we’d like.
I feel mostly bad for the children out there dealing with this psychologically damaging crisis. At least we are good parents and are not letting our kids be affected.