Five trends shaping retail’s post-pandemic future

Dr Angelus Bernreuther, head of investor relationship management at Kaufland, asks what the pandemic means for the long-term future of retail.

The pandemic has changed many things. And Covid will have long-lasting effects on our society, economy and politics. It is without doubt a great challenge for the real estate industry across all asset classes. Retail real estate is particularly in focus.

What does this mean for the retail sector and retail real estate? Firstly, it is important to say that the long-term trends haven’t disappeared. Some may perhaps have been overtaken by Covid, some have been accelerated.

But for sure, they will come back to the agenda. Existing trends such as digitalisation, ESG and urbanisation, now include aspects like social distancing, e-commerce and home shopping.

So how do we create vibrant locations in future? This is not an easy question to answer. But the latest Kaufland study – Footfall-Anchors Post Corona – 5 Propositions for the New Future of Retail – offers some idea of what the new normal could look like.

1. Strongest evidence: Sustainability

ESG will certainly have more impact on our society, economy and thus, on real estate markets. Green building, green finance and much more will drive ESG even further.

2. No surprise: Digitalisation will have a major influence on retail

Covid has accelerated the online trend and the customer now has more options to shop. But digitalisation is more than just an online channel. It’s the new way to interact with the customer.

‘Existing trends such as digitalisation, ESG and urbanisation, now include aspects like social distancing, e-commerce and home shopping.’

Dr Angelus Bernreuther, Kaufland

3. Mixed-use assets are on the move

This is high on the agenda of investors and cities. And it’s a logical consequence of the long-term trend of urbanisation. Of course, the mixed-uses have to be adjusted to the location and grocery trade is often an ideal partner.

4. More change, more revitalisation

This won’t be necessary for all retail assets. And the outcome must create more value. But in terms of greater flexibility within a building, the trend is very clear.

5. Last, but not least: Food retailing will play a major role in the future retail landscape

With a higher online resilience, grocery retail supports and drives physical footfall. Of course, neighbourhood retailing won’t save entire shopping locations, such as shopping centres and high streets. But it will bring a reliable footfall, especially in smaller cities and the district centres of metropolitan areas. For big box retail outlets, it’s more obvious: no food, no function!

The transformation in retail and retail real estate will advance further. It is one of the most exciting futures – so let’s tackle it! The supermarket sector will play a crucial role in dealing with these new challenges. Kaufland is ready to take on these challenges with strong retail locations, attractive municipalities and reliable investment:

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