Repurposing Retail After COVID-19
Reonomy, New York, said retail properties are being recycled and repurposed due to COVID-19 as retailers redefine the sales channels they use to reach consumers.
“Many vacant retail spaces have been and are being repurposed,” Reonomy said its Repurposing Retail in the Wake of COVID-19 report. “Some cases see developers taking over properties and reclassifying them completely. Other scenarios see retailers repurposing the space they have to be used in ways more conducive to the current environment.”
The COVID-19 outbreak sped up the repurposing trend, Reonomy said. “The severity of this pandemic and the associated response has severely disrupted the broader economic and societal norms that preceded it just a few, but seemingly distant, months ago,” the report said. “As a result, retail space owners and occupiers are adapting their business models to survive.”
Retailers are repurposing space to focusing more on digital transactions and increasing space available for customer curbside pickup, the report said. Some large mall owners including Seritage, Washington Prime and Brookfield’s GGP portfolio have made their properties available for governmental and community organizational use.
“This is a temporary, but effective, use of these spaces,” Reonomy said. “When non-essential space which otherwise would be closed is able to be repurposed and serve as surge capacity to help fulfill essential needs and help combat this pandemic, it is beneficial for all within that community and is an effective use of the space.”
Bed, Bath and Beyond temporarily closed all but 170 of its stores. The firm converted nearly 25 percent of Bed Bath & Beyond and Buybuy Baby stores into regional fulfillment centers. “The company has seen digital business surge and will be introducing more buy-online and pick-up-in-store options,” the report said.
Restaurants are also evolving. Some are shifting to sell groceries, the report said. New York-based Just Salad restaurants launched a delivery program that includes not just produce and proteins but everything from meal kits to toilet paper. And Taiyaki and the Dough Club, two New York-based establishments that specialize in Japanese desserts, introduced online grocer Konveny.com to deliver Japanese products ranging from rice crackers to red-bean ice-cream bars.
“Until there is a clear path forward, many of these retailers and property owners will be in crisis mode, trying to stay afloat by adapting to the new environment, exploring alternatives and testing and adopting change,” the report said. “That said, retail is not going to disappear; it’s just changing dramatically. Many retailers are not going to make it through this crisis, but Americans will continue to consume. This period might just end up looking like a retail reset–the changing of power from the established big retailers of the past, department stores, for example, to some newer, more diversified sales channels.”
