Shelter-in-place guidelines mandated by federal and state government during COVID-19 accelerated changes in consumer shopping habits that were already in motion pre-pandemic. As the country continues its emergence from mass shutdowns, retailers and developers are being forced to adjust to new shopping patterns, delivery methods and the physical presence and make-up of stores within malls and neighborhood centers. Cailey Locklair, President of the Maryland Retailers Association and Scott Wimbrow, President and Principal, MacKenzie Commercial Real Estate Services offer perspectives on what the future holds for retail.

Cailey Locklair (CL): Consumers increasingly gravitated to one-stop shopping venues during the pandemic to minimize trips and achieve greater comfort and, because habits are difficult to alter, we expect a continuation of this trend. There remain plentiful opportunities for niche retailers offering hard-to-find products including rare import items, collectibles and products that require customization. Concepts that have successfully created an omni-channel presence offering different shopping and pick-up options will thrive, and we see physical stores filling a “showroom” requirement with consumers subsequently returning to their homes to complete an on-line purchase.

Scott Wimbrow (SW): Service-oriented strip centers with concepts that include nail and hair salons and phone services have completely rebounded. The general public started to emerge from their homes this spring and pent-up demand for in-person shopping and spending time outdoors, combined with the continued lack of travel, has resulted in larger-than-normal crowds at all shopping venues with Main Street venues in particular. The lack of available daycare and responsibilities at home have caused labor shortages and the lack of availability of certain big ticket items including appliances and cars has dampened a stronger recovery.      

CL: The increased emphasis on the home, which has morphed into a do-it-all place where people work, entertain, play and relax has translated into improvements and investments. This has benefitted omni channel and hardware stores, residential construction and the remodeling industries.

Consumers buying habits shift

CL: During the pandemic, consumers were focused on the speed and safety of their trips to the grocery store and placed an emphasis on purchasing items with elongated shelf lives. This “food-gloom” mentality has dramatically subsided and families are shifting to supermarkets offering higher-quality food, and prepared meals with less concern on pricing. With no restaurants to visit, the general public either cooked more frequently or ordered on-line to receive specially-prepared meals delivered to their homes. Many found that they enjoyed the process and the quality. One big loser is the convenience store industry which lost the ability to sell prepared foods for an extended time and habits have now shifted.     

SW: Specialty grocery stores that did not offer a complete shopping experience suffered slightly last year, as consumers resisted making a special trip to purchase paper goods and other household staples. Supermarkets across the board stepped up the availability of home delivery, with the downside being less choices of product selection and higher pricing. The tide has now shifted. Consumers are comfortable with elongated shopping experiences and we are also seeing multiple workers scurrying around the store to fill on-line orders.

Filling vacant retail spaces

CL: Opportunities are in abundance for concepts looking to secure high-visibility shopping center locations. Developers are getting creative by transforming available spaces into pop-up restaurants and shops, flex/office space, experienced-based entertainment, community centers and storage facilities. Big box retail spaces are being sub-divided to accommodate different uses. For example, Annapolis Mall is creating a local bazaar and food court.

SW: For every one restaurant that goes out of business, there are two or three behind it and immediately ready to takes its place. Second generation restaurant space remains in high demand and there is no shortage of new concepts. Medical uses are a viable backfill candidate for large or big-box stores especially in the suburban market given the plentiful free parking and signage opportunities, combined with access to a population less interested in traveling to medical centers in the city. Retail centers in urban areas will continue to struggle as workers have emptied out of large employment centers and companies are having difficulty luring employees downtown. Retail always finds a way to survive and remake itself and we are confident of the emergence of a new iteration of shopping concepts.