With a large number of vaccines covering the world, the world is in a “New Normal” era. As a result, retailers are returning to physical stores, especially shopping malls and retail stores. So, how has the rental price of a store in a shopping mall changed after the pandemic, and what retailers must prepare for the shopping centre rent. In this article, we will provide some information on rents for shopping malls during the “New Normal”.
What does shopping centre rent include?
During the “New Normal” era, when returning to mall stores, retailers must consider these costs, including location rental, materials and equipment cost, and employee salary. About the location cost, retailers have to face a great fluctuation in this cost because during the pandemic, a large part of retailers returned their stores to the shopping mall owners. Therefore, during the post-pandemic period, a lot of retailers will come back, which may result in a higher cost of location.
Retailers also have to bear material and equipment costs, as they will have to remodel their stores to welcome the return of customers to physical stores in malls, which can make shopping centre rent higher in the “New Normal”.
Employee salary is also an expense that retailers need to prepare for a change in the “new normal” era. During the pandemic, many employees have had to quit their jobs and move on to other jobs. When shopping centers reopen, stores return is also the time when retailers have to think about hiring staff for their stores. Salaries can fluctuate up or down depending on market conditions, but the cost of employee wages is mostly a large part of the retail shopping centre rent.
What retailers should prepare for ‘New Normal’ shopping centre rent?
Higher or lower rental costs
Is the higher or lower rent what retailers must be prepared for? This depends on the product the retailers are dealing in and the business model they are aiming for. Assuming that during the pandemic, they have maintained an extremely developed form of online sales. During the “New Normal” period, they will only need to rent a small place in the mall to make a store to cater to the trend. Shopping online and picking up in-store is increasingly popular among today’s customers. Therefore, the location cost will be cheaper. Besides, a small shop in a commercial center will not need too much cost for equipment and staff salaries; therefore, the shopping centre rent will be lower.
Conversely, when retailers want to have a larger business scale, they are required to rent a larger location. The cost of equipment and materials along with salaries for employees increases accordingly, so their shopping centre rent will be higher.
Competition in finding places
One thing is for sure when the “New Normal” emerges, retailers will have to return to the fierce races as before, and possibly even fiercer due to increasing trends in consumption and consumer purchases. Shopping center rent will also witness greater competition when many retailers are looking for store locations for their businesses.
Conclusion
Retailers must brace themselves for a return to competition during the “New Normal”. Along with that competition, shopping centre rent will witness a dizzying change.
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