• Different Approaches to Opening Retail

    The differing approaches to reopening retail

    May 8, 2020

    “There is such a yearning from small businesses and national tenants to reopen,” said C. Kelly Cofer, founder and CEO of consulting, research and recruitment firm The Retail Coach. “Opening their doors back up is key not just from a cash-flow standpoint, but also from a confidence standpoint.”

    Masks, gloves, social distancing and see-through plastic barriers at checkout stands will be part of the shopping experience for the foreseeable future. With some high-profile exceptions, consumers have adapted to the safety accoutrements and procedures while shopping at grocery stores and other essential stores. Now, nonessential stores are eager to get back to business. The retail industry employs some 52 million, according to the National Retail Federation, and a good chunk have been furloughed or laid off.

    In mid-April, the Trump administration proposed reopening guidelines, suggesting gradually opening commercial venues in three phases based on declines in reported COVID-19 symptoms, confirmed cases and hospitalizations, as well as on the ability to test for at-risk healthcare workers. It emphasizes the continued use social distancing, masks, hand sanitization and vigilance among high-risk groups.

    A handful of states began relaxing restrictions in late April and many more are following suit in May. Georgia Governor Brian Kemp was one of the first states to reopen most businesses, on April 24th, including gyms, bowling alleys, hair and nail salons and massage therapists. Restaurants and theaters were allowed to open April 27, while nightclubs and other entertainment operations remain closed. The state of 10.6 million residents recently had 31,603 coronavirus cases and 1,384 deaths.

    In Nebraska, which shut down certain businesses and activities rather than issuing a stay-at-home order, restaurants, tattoo parlors, childcare centers, salons and some other businesses began opening on May 4. The state of nearly 3 million people recently had confirmed 7,190 cases and 90 deaths.

    Developer Rod Yates held a soft reopening of the 410,000-square-foot Nebraska Crossing shopping center, between Omaha and Lincoln, on April 24. The property had been shuttered for a few weeks, though some restaurants offered curbside service and retail managers fulfilled online orders from the stores, Yates said. “We’re not forcing any of our tenants to open, but several brands started asking us to look at opening sooner rather than later,” he said. “We want to make sure we execute with best practices in place.” Yates has ordered plastic checkout barriers, as well as medical-grade infrared thermometers for retail managers to monitor their employees – and customers, if they desire. He also is sanitizing common areas and encouraging customers to wear masks and to stay at home if they’re at high risk or feel sick.

    Patrons walk around Arbor Place, in Douglasville, Georgia, on May 4. The shopping center reopened on May 1 under strict guidelines

    Other landlords are mulling similar protocols. Trademark has formed relaunch committees at each of its properties to assure that shoppers feel comfortable and safe, says Terry Montesi, founder and CEO. He’s not sure when Trademark’s centers will begin to reopen, but most are concentrated in Texas, which has released a plan to gradually lift restrictions on nonessential businesses. The state of 29 million people reported 35,390 cases and 973 deaths in early May. “We’re digging in to how can we be a good host. What kind of messaging or signage do we need to provide before and after customers walk through the doors to remind them of the guidelines that are in place?” Montesi said. “I’m sure we’ll have more hand sanitizer stations, and maybe we’ll need to sell or provide customers with face masks. We’ll certainly be cleaning everything, and we might remove furniture. There are so many things to think about.”

    Shopping center owner and manager Woodmont Co. is instituting several measures. In enclosed malls, for example, the firm plans to reduce the number of tables and ramp up bussing services in food courts, establish one-way traffic patterns in common areas and cut back on common-area seating, among other measures, says Fred Meno, president and CEO of asset services. The company also will encourage tenants to control the number of people in stores and to enforce social distancing. “It’s somewhat of a leap of faith that we’re taking here as a society, in that people are going to watch out for themselves and others,” he said. “If you don’t believe you can maintain social distancing because of the number of people in a store, then go to another store and come back later. We’ll point those things out with signage.”

    Many organizations, including ICSC, are providing operational guidance to retailers and shopping center owners. Cushman & Wakefield recommends that retail operators assess aisle widths, fixture spacing and ventilation. It also urged retailers to adopt touch-free environments via virtual reality and other technologies.

    While the country hoped for a speedy recovery in the early days of the pandemic, industry professionals don’t anticipate traffic or sales returning overnight to pre-COVID-19 levels. Instead, they foresee a prolonged struggle. In China, whose GDP dropped 6.8 percent in the first quarter, economic activity is returning slowly as businesses reopen in “fits and starts,” Naveen Jaggi, JLL president of America retail advisory services, advised during a JLL retail webinar. In Shanghai, cinemas got a green light in March to reopen and then closed again abruptly days later, he noted. Wuhan, the epicenter of the virus, began reopening on April 8, but retail traffic is light and some shops remain closed while others have opened on sidewalks to avoid crowds in confined places.

    Still, as U.S. nonfarm payroll employment fell by 20.5 million in April, according to the Bureau of Labor Statistics, many operators in the U.S. are ready to return to work, even if it means employing extraordinary mitigation measures. “There’s going to be a new norm in the way people live and shop,” said Gregory Tannor, an executive managing director and principal with Lee & Associates in New York, “but at this point, I think tenants will do whatever it takes to open their doors.”