CBRE Hungary's retail report following the reopening
Shops and shopping malls have been opened in stages from the 4th of May. The first results show that the reopening has favored outlet centers, regional retail parks and smaller shopping malls, but classic high street shops now understand the lack of purchasing power of tourists and office workers – according to the latest CBRE Hungary data.
We are no longer afraid to go into stores
With the easing of pandemic measures and the gradual opening of stores, more and more people are going shopping, and the number and traffic of shopping malls is increasing week by week. Compared to the same period in 2019, the number of visitors to shopping centers is already between 50-90% complete. Hungarians prefer to visit smaller, out-of-town shopping centers and retail parks, but the big surprise was that outlet centers show a 15% increase compared to last year. The public has become much more aware in this time of uncertainty, with much less impulse buying, and the least purchasing happening in electronic and specialty stores.
Downtown stores lack purchasing power
Due to the lack of tourism and office workers - many still do their work from home - the classic high street shops are almost empty, having only 20% of turnover compared to last year. “The shops on Andrássy street perform better than average, here the turnover reaches 50% of last year's value, which indicates that the domestic purchasing power does exist in this sector. Unfortunately, however, these stores will only be able to regain their previous turnover once tourism recovers, which is estimated to take 1-2 years.” - said Anita Csörgő, Head of Retail, CBRE Hungary.
Some did not survive
The drop in turnover has led to the permanent closure of some stores, the withdrawal of brands, and we can be sure that the list will only expand in the next 1-2 years. The Camaïeu clothing brand has gone bankrupt, divesting 800 of its stores and 3,000 employees globally, but Musette shoe store and Austrian lingerie brand Palmers will also no longer open after the crisis. "However, the good news is that new brands are also interested in the Hungarian market, so by 2021-'22 the range of brands available in Hungary may expand," added Anita Csörgő.
How to proceed with leases
Many landlords have made concessions to tenants during the months of closure and reopening, and many contracts have already been renegotiated, although the difficulty is yet to come. The moratorium on terminating leases will expire at the end of June, so quite a few stores will definitely have to move, which will also give shopping malls and shopping streets the opportunity to freshen up and attract new retailers.